EXHIBIT 10.10.2
AMENDED AND RESTATED LEASE
AMONG
LAURELTON INVESTMENTS LTD. AND KBK NO. 197 VENTURES LTD.
(TOGETHER, THE "LESSOR")
AND
CRYSTAL DECISIONS, CORP.
(THE "LESSEE")
AND
CRYSTAL DECISIONS, INC.
(THE "INDEMNIFIER")
TABLE OF CONTENTS
PAGE
PART 1 - DEFINITIONS..................................................................... 1
1.1 Definitions..................................................................... 1
PART 2 - DEMISE AND TERM................................................................. 8
2.1 Demise and Term................................................................. 8
2.2 Readjustment.................................................................... 9
PART 3 - RENT, TAXES AND OTHER CHARGES................................................... 10
3.1 Basic Rent...................................................................... 10
3.2 Payment of Rent and Additional Rent............................................. 10
3.3 Net Lease....................................................................... 10
3.4 Rent............................................................................ 10
3.5 Single Lease.................................................................... 11
3.6 Place of Payment................................................................ 11
3.7 Lessee's Payment of Taxes/Sales Taxes........................................... 11
3.8 Rental for Irregular Periods.................................................... 11
3.9 Estimate of Additional Rent..................................................... 11
3.10 Reporting and Audit of Additional Rent.......................................... 12
PART 4 - ACCEPTANCE AND FIXTURING OF DEMISED PREMISES.................................... 12
4.1 Lessee Loan for the Original Premises (Except for the Main Floor Expansion
Leased Premises)............................................................... 12
4.2 Leasehold Improvements.......................................................... 12
4.3 HVAC Inducement................................................................. 12
4.4 Early Occupation by Lessee...................................................... 13
4.5 As Is/Lessee's Alterations...................................................... 13
4.6 Restrictions on Construction Activity........................................... 14
4.7 Lessor's Repairs/Work for the Original Premises (Except for the Main Floor
Expansion Leased Premises)..................................................... 14
4.7A Lessor's Repair/Work for the Main Floor Expansion Leased Premises............... 15
4.7X. Xxxxxx'x Repair/Work for the Remainder Premises................................. 16
4.8 Cash Inducement in Lieu of Lessor's Repairs/Work................................ 19
4.9 Allowances for Leasehold Improvements........................................... 19
4.10 Lessor's Seismic Upgrading...................................................... 20
4.11 Deferment of Lessor's Repairs/Work on First Expansion Premises Improvements..... 20
4.12 Responsibility for Repairs/Work to Base Building Systems........................ 20
4.13 Warranties on Leasehold Improvements............................................ 20
PART 5 - CONDUCT OF BUSINESS............................................................ 20
5.1 Permitted Use................................................................... 20
5.2 Waste and Nuisance.............................................................. 21
5.3 Tidy Condition/Compliance With Laws............................................. 21
5.4 Environment Warranty - Lessee................................................... 21
5.5 Signs........................................................................... 22
5.6 Payment of Lessee's Expenses.................................................... 22
PART 6 - REPAIRS........................................................................ 22
6.1 No Obligation to Repair/Replace................................................. 22
6.2 Repairs by Lessee............................................................... 22
6.3 Damage by Lessee................................................................ 23
6.4 Building Compliance/Ordered Upgrades............................................ 23
6.5 Alterations..................................................................... 23
6.6 Increase in Insurance........................................................... 23
6.7 Plans and Specifications........................................................ 24
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6.8 Non-compliance.................................................................. 24
6.9 Lessor's Property/Fixtures...................................................... 24
6.10 No Liens........................................................................ 25
6.11 Destruction of Demised Premises................................................. 25
PART 7 - COMMON AREAS/SERVICES........................................................... 25
7.1 Control of Common Areas and Facilities.......................................... 25
7.2 Building Services............................................................... 25
7.3 Building Alarm.................................................................. 26
7.4 Parking......................................................................... 27
7.5 Storage and Emergency Generator Rooms........................................... 27
7.6 Refuse and Deliveries........................................................... 27
7.7 Directory Board................................................................. 28
7.8 Satellite and Communications.................................................... 28
7.9 Bicycle Storage................................................................. 28
7.10 Floor Loading................................................................... 29
PART 8 - ASSIGNMENT AND SUBLETTING....................................................... 29
8.1 Assignment...................................................................... 29
8.2 Reorganization, Change in Ownership or Use by Affiliate......................... 29
PART 9 -- INSURANCE...................................................................... 30
9.1 Lessee to Insure................................................................ 30
9.2 Lessor to Insure................................................................ 30
PART 10 - EXCLUSION OF LIABILITY AND INDEMNITY........................................... 31
10.1 Lessee's Indemnity.............................................................. 31
10.2 Lessor's Indemnity.............................................................. 31
10.3 Exclusion of Liability.......................................................... 31
PART 11 -- LESSOR'S RIGHTS AND REMEDIES.................................................. 32
11.1 Default......................................................................... 32
11.2 Termination of Lease............................................................ 32
11.3 Payment of Lessor's Expenses.................................................... 32
11.4 Right of Lessor to Perform Lessee's Covenants................................... 33
11.5 Re-entry........................................................................ 33
11.6 Right of Lessor to Seize........................................................ 33
11.7 Remedies for Non-payment........................................................ 33
11.8 Non-waiver...................................................................... 34
11.9 Remedies Cumulative............................................................. 34
11.10 Interest........................................................................ 34
PART 12 -- MORTGAGES AND ASSIGNMENTS BY LESSOR........................................... 34
12.1 Subordination................................................................... 34
12.2 Status Statement................................................................ 34
12.3 Non-disturbance Agreement....................................................... 35
12.4 Registration.................................................................... 35
PART 13 -- OVERHOLDING BY LESSEE......................................................... 35
13.1 Month to Month Tenancy.......................................................... 35
PART 14 - LESSOR'S COVENANTS............................................................. 35
14.1 Lessor's Covenants.............................................................. 35
14.2 Environment Warranty - Lessor................................................... 36
PART 15 -- GENERAL CONDITIONS............................................................ 37
15.1 Rules and Regulations........................................................... 37
15.2 Notice.......................................................................... 37
15.3 Showing of Premises............................................................. 38
15.4 Dispute Resolution.............................................................. 39
PART 16 - RIGHT OF FIRST OFFER........................................................... 39
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16.1 Right of First Offer............................................................ 39
PART 17 - OPTION TO RENEW................................................................ 40
17.1 Grant of Option................................................................. 40
17.2 Basic Rent...................................................................... 41
17.3 Exercise of Option.............................................................. 41
17.4 Remainder First Floor Premises.................................................. 41
17.5 Office Premises................................................................. 42
17.6 Amendments to the Lease......................................................... 42
PART 18 -- INDEMNITY..................................................................... 42
18.1 Indemnity....................................................................... 42
18.2 Enforcement of Indemnity........................................................ 43
18.3 Continuation of Indemnity....................................................... 43
18.4 No Defence...................................................................... 43
18.5 Modification in Writing......................................................... 44
18.6 Authority....................................................................... 44
18.7 Enurement....................................................................... 44
18.8 Assignments, Reorganization, Etc................................................ 44
18.9 New Lease....................................................................... 44
18.10 Governing Law and Attornment.................................................... 44
PART 19 -- RIGHT OF FIRST OPPORTUNITY.................................................... 45
19.1 Right of First Opportunity...................................................... 45
19.2 Right of First Refusal to Purchase.............................................. 45
19.3 Exceptions to Right of First Refusal to Purchase................................ 46
PART 20 -- CONTRACTION AND EARLY TERMINATION RIGHT....................................... 46
20.1 Contraction and Early Termination Right......................................... 46
20.2 Partial Floor Areas............................................................. 49
PART 21 -- MISCELLANEOUS................................................................. 50
21.1 Joint and Several Obligations................................................... 50
21.2 Time of the Essence............................................................. 50
21.3 Headings........................................................................ 50
21.4 Naming Rights................................................................... 50
21.5 Loading Dock.................................................................... 50
21.6 Governing Law................................................................... 50
21.7 Entire Agreement................................................................ 50
21.8 Enurement....................................................................... 51
SCHEDULES
SCHEDULE "A" -- Plan of Premises
SCHEDULE "B" -- Rules and Regulations
SCHEDULE "C" -- Permitted Encumbrances
SCHEDULE "D" -- Omnicron Design
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AMENDED AND RESTATED LEASE
This amended and restatement of the Lease made September 27, 1999 between the
parties hereto as amended by an amendment to lease made as of June 22, 2000 is
dated for reference and to be effective as of February 28, 2002.
BETWEEN:
LAURELTON INVESTMENTS LTD. AND KBK NO. 197 VENTURES LTD., having a
business office at 520 -- 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(together, the "Lessor")
AND:
CRYSTAL DECISIONS, CORP. (FORMERLY KNOWN AS SEAGATE SOFTWARE
(CANADA) INC. AND SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP
(CANADA), INC.), having a business office at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Lessee")
AND:
CRYSTAL DECISIONS, INC., having a business office at 000 Xxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx, X.X.X., 00000
(the "Indemnifier")
WHEREAS:
A. The parties executed a lease made September 27, 1999 (and registered a
short form of lease in the Vancouver Land Title Office under number
BR150878) which was amended by an amendment to lease dated for reference
June 22, 2000 (together the "Lease"); and
B. The parties have agreed to amend and restate the Lease as herein provided;
In consideration of the premises and the mutual covenants, agreements and
conditions herein contained, it is hereby covenanted and agreed between the
parties as follows:
PART 1 - DEFINITIONS
1.1 Definitions
The terms defined herein shall have, for all purposes of this Lease, the
following meanings unless the context expressly or by implication
otherwise requires:
(a) "Additional Rent" means all sums of money, other than Basic Rent,
which are required to be paid by the Lessee pursuant to any
provision of this Lease whether or not they are designated as
"Additional Rent";
(b) "Assignment" has the meaning set out in Section 8.1;
(c) "Basic Rent" has the meaning set out in Section 3.1;
(d) "Building" means the building, improvements, structures and
facilities, including parking facilities, erected on the Lands and
having a civic address of 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx;
(e) "Commencement Date" means, for each of the premises comprising the
Demised Premises, the respective date set out in Column 3 in Section
2.1;
(f) "Consumer Price Index" means the Consumer Price Index for all items
for Vancouver, British Columbia issued from time to time by
Statistics Canada or its successor, or any other measure hereafter
employed by Statistics Canada in lieu of such price index that
measures the cost of living in Vancouver, British Columbia. If
Statistics Canada or its successor no longer publishes the Consumer
Price Index or no longer is operated by the Government of Canada,
then any alternate price index designed to fairly reflect changes in
the consumer purchasing power of the Canadian dollar, as agreed by
the parties, failing agreement, the dispute shall be settled in the
manner set out in Section 15.4;
(g) "Demised Premises" means, as and from the respective Commencement
Dates, collectively the Original Premises and the Remainder
Premises, each of which premises is outlined in BLACK on the floor
plans annexed hereto as Schedule "A";
(h) "EML Inducement" has the meaning set out in Section 4.7B(i);
(i) "Expansion Premises" means the Main Floor Expansion Leased Premises,
First Expansion Leased Premises, the Second Expansion Leased
Premises and the Third Expansion Leased Premises (but does not
include any space leased pursuant to the Right of First Offer in
Section 16.1);
(j) "Expiry Date" means, for each of the premises comprised in the
Demised Premises, the respective date set out in Column 4 in Section
2.1;
(k) "First Floor Patio" has the meaning set out in Section 2.1;
(l) "First Remainder Premises" means 20.6% of the remaining Usable Area
in the Building not leased or committed for lease as of February 1,
2002 and described in Column 1 in Section 2.1;
(m) "First Expansion Leased Premises" means the premises in the Building
and described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto;
(n) "Force Majeure" means any act or occurrence which delays or hinders
or prevents a party from the performance of any term, covenant or
act required under this Lease by reason of strikes, labour troubles,
inability to procure material or services, power failure,
restrictive governmental laws or regulations, riots, insurrection,
sabotage, rebellion, war, acts of God or other reasons beyond the
reasonable control of the applicable party hereto;
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(o) "Hazardous Substances" means any pollutants, contaminants,
deleterious substances, underground or above-ground tanks, asbestos
materials, hazardous, corrosive, or toxic substances, special waste
or waste of any kind, halon, radon, PCB's, or other pollutants,
contaminants or hazardous materials or any other substance which is
now or hereafter prohibited, controlled, or regulated under
environmental laws;
(p) "Increase in Consumer Price Index" means the fraction which has as
its numerator the Consumer Price Index for the year in question and
has as its denominator the Consumer Price Index as of June 1, 2000;
(q) "Initial Leased Premises" means the premises in the Building and
described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto;
(r) "Lands" means the lands on which the Building is constructed and
legally described as: Firstly: Xxxx 00 xxx 00, Xxxxx 00, Xxxxxxxx
Xxx 541, Plan 3469 and; Secondly: Xxx "X", Xxxxx 00, Xxxxxxxx Xxx
000, Xxxx 00000;
(s) "Leasehold Improvements" means all of the improvements to the
Demised Premises to be carried out by the Lessee including:
(i) all Lessee's interior improvements and remodelling, including
a new main reception area, open workstation areas, private
hard wall offices, conference rooms, coffee/kitchenettes with
hot and cold running water with sink, cabinetry, etc.,
additional hard wall offices and laboratories, signage,
telecom and data cabling costs, certain and specific
demolition and reconstruction, new carpeting, doors and
hardware throughout the Demised Premises, wall coverings,
painting, and patching throughout, the HVAC system and
mechanical and electrical installations; and
(ii) exterior Building and lobby and floor directory signage;
(t) "Lessor's Repairs/Work" means the work to be performed by the Lessor
and described in Sections 4.7, 4.7A and 4.7B;
(u) "Main Entry" has the meaning set out in Section 4.7B(j);
(v) "Main Floor Expansion Leased Premises" means the premises in the
Building and described in Column 1 in Section 2.1 and identified as
such on Schedule "A" hereto, and forming part of the Original
Premises;
(w) "Operating Costs" means (without duplication) the total costs and
expenses incurred, accrued or attributed by the Lessor to operate,
service, maintain, insure, manage, promote, clean, supervise,
replace and repair the Lands, Building and Demised Premises and any
common facilities and common areas of the Building, and the total
costs and expenses incurred, accrued or attributed by the Lessor to
discharge its obligations under this Lease. Without limiting the
generality of the foregoing, such costs and expenses shall
specifically include the supply of all utilities; landscaping;
common area interior glazing repair and replacement, if damaged;
minor repairs and partial replacing of roof membrane; premiums for
insurance the Lessor, in its sole discretion, deems necessary for
the operation of the Lands and Building, acting reasonably;
painting; signs; sanitation control; snow removal; security; rental
or replacement of machinery and equipment which by their nature
require periodic replacement or substantial replacement (including
3
without limitation, maintenance and janitorial equipment); the
reasonable wages and salaries of personnel (including any benefits
paid) and fees to independent contractors required in connection
therewith; and a management fee payable to a third party or the
Lessor for managing the Lands and Building (without duplication for
the cost of salaried employees), which management fee in either case
shall be limited to an amount equal to the aggregate of $0.60 per
square foot of Rentable Area of the Original Premises plus $0.48 per
square foot of the Rentable Area of the Remainder Premises, such
amount to be paid during each year of the initial Term of this Lease
and subject to an Increase in the Consumer Price Index during any
renewals. Operating Costs shall exclude, or have deducted from them,
as the case may be:
(i) all amounts which otherwise would be included in Operating
Costs which are recovered by the Lessor from tenants (other
than under sections of their leases comparable to Section 3.2
of this Lease);
(ii) such of the Operating Costs as are recovered from insurance
proceeds, to the extent such recovery represents
reimbursements for costs previously included in Operating
Costs;
(iii) interest on debt and capital retirement of debt;
(iv) ground rent payable by the Lessor to the owner of the Lands
under any ground lease of the Lands;
(v) gas and hydro costs, except as permitted pursuant to Section
7.2;
(vi) the amount allocated from time to time by the Lessor to, and
relating to the Lands and Building of, any capital tax payable
by the Lessor or the owners of the Lands and Building under
any legislation, provincial or federal, imposing taxes on
account of capital, calculated as if the Building were the
only property of the Lessor or the owners of the Lands and
Building;
(vii) costs of maintaining and repairing structural elements of the
Building, costs for the initial installation of all external
glazing and costs of correcting construction defects as they
relate to the base Building finishes;
(viii) costs for which the Lessor is reimbursed;
(ix) any bad debt loss, rent loss, or reserves for bad debts or
rent loss;
(x) costs associated with the operation of the business entity
which constitutes the Lessor as the same are distinguished
from the costs of operation of the Building, including
accounting and legal matters, costs of defending any lawsuits
with any mortgagee, costs of selling, syndicating, financing,
mortgaging or hypothecating any of the Lessor's interest in
the Building, costs of any disputes between the Lessor and its
employees (if any) not engaged in the Building operation,
disputes of Lessor with building management, or fees or costs
paid in connection with disputes with other tenants;
(xi) fines or penalties and interest thereon arising from the acts
or omissions of the Lessor or those for whom it is responsible
for at law;
4
(xii) subject to Section 9.2, any damage or loss resulting from any
casualty which the Lessor covenanted to insure against
(except to the extent of any deductible);
(xiii) capital costs which do not materially reduce Operating
Costs or which do not improve the operation of the Building
in a manner which is of material benefit to either the Lessee
or to the Lessee's business. The parties further agree that
capital costs are not costs normally incurred for the repair,
replacement or maintenance of existing building equipment or
systems, but will include replacements resulting in material
upgrades to such equipment or systems, and will include the
replacement of HVAC systems and the main electrical
transformers. For greater certainty, the parties agree that,
without limitation, replacement of carpeting and toilets in
common areas when needed and to a standard consistent with a
Class B professional building, and minor repairs and partial
replacement of roof membranes are examples of repair and
maintenance rather than capital cost items, but upgrades made
to the Building to enable the Lessor to better market the
Building are examples of capital cost items not of material
benefit to either the Lessee or its business;
(xiv) subject to Section 14.2, the cost of removing, encapsulating
or otherwise abating any Hazardous Substance in or about the
Building (except if placed or caused by the Lessee or those
for whom the Lessee is responsible at law);
(xv) legal fees pertaining to leasing issues, space planner's
fees, real estate brokers' leasing commissions, lease
take-over costs, advertising and marketing expenses and all
other leasing expenses;
(xvi) the wages of an employee for the periods of time that such
employee is not devoting his or her time to the Building
(allocations of the time pooled employees are permitted); and
(xvii) all costs associated with repair or maintenance of HVAC
equipment, plumbing, electrical equipment and all other
utilities servicing all Rentable Areas in the Building other
than the Demised Premises;
5
(x) "Original Premises" means the Initial Leased Premises and the
Expansion Premises;
(y) "Patio Inducement" has the meaning set out in Section 4.7B(g);
(z) "Permitted Encumbrances" has the meaning set out in Section 19.1;
(aa) "Possession Date" means, for each of the premises comprising the
Demised Premises, the respective date set out in Column 2 in Section
2.1 for the purpose of planning and constructing the Leasehold
Improvements;
(bb) "Proportionate Share" means the proportion, at any given time, that
the aggregate Rentable Area of the premises comprising the Demised
Premises as at that time is of the aggregate of all Rentable Areas
in the Building;
(cc) "Remainder First Floor Premises" has the meaning set out in Section
17.3(a);
(dd) "Remainder Premises" means the First Remainder Premises, the Second
Remainder Premises and the Third Remainder Premises (but does not
include any space leased pursuant to the Right of First Offer in
Section 16.1);
(ee) "Rent" has the meaning set out in Section 3.4;
(ff) "Rentable Area" means, with respect to the Demised Premises:
(i) in the case of the Original Premises:
(A) from the date of this Lease to and including September
30, 2003, Rentable Area of those parts of the Original
Premises on the first and second floor of the Building
means the Usable Area of such premises multiplied by
112%, and on the third floor of the Building means the
Usable Area of such premises multiplied by 108.4%; and
(B) from October 1, 2003 for the balance of the Term and any
renewal thereof, the Rentable Area of the Original
Premises means the rentable area of such Original
Premises calculated in accordance with the methods of
measuring rentable office areas as described in the
Standard Method for Measuring Floor Area in Office
Buildings, ANSI Z65.1-1996, as promulgated by the
Building Owners and Managers' Association ("BOMA")
International; and
(ii) in the case of the Remainder Premises:
(A) from the date of this Lease to and including September
30, 2003, the Rentable Area of the Remainder Premises
means the Usable Area of the Remainder Premises without
a gross up factor; and
(B) from October 1, 2003 for the balance of the Term and any
renewal thereof, the Rentable Area of the Remainder
Premises means the rentable area of such Remainder
Premises, calculated in accordance with the methods of
measuring rentable office areas as described in the
Standard Method for Measuring Floor Area in Office
Buildings, ANSI Z65.1-1996, as promulgated by the
Building Owners and Managers' Association ("BOMA")
International;
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(gg) "Rentable Areas in the Building" means:
(i) from the date of this Lease to and including September 30,
2003, the aggregate of all rentable areas within the Building,
as determined from time to time by the Lessor, acting
reasonably, being the aggregate of the Rentable Area of the
Demised Premises during such period, the rentable areas of all
spaces and premises in the Building serviced by air
conditioning, as defined in the Lessor's other, or if expired
the last, leases and rental contracts with other tenants from
time to time, and the rentable area of any vacant space
serviced by air conditioning measured in a comparable manner
to such other leases and rental contracts; and
(ii) from October 1, 2003 for the balance of the Term and any
renewal thereof the aggregate of all rentable areas in the
Building calculated in accordance with the methods of
measuring rentable office areas as described in the Standard
Method for Measuring Floor Area in Office Buildings, ANSI
Z65.1-1996, as promulgated by BOMA International;
(hh) "Sales Taxes" means taxes, value-added taxes, multistage taxes,
business transfer taxes and any other similar taxes imposed in
respect of the rent payable by the Lessee under this Lease or in
respect of the Demised Premises;
(ii) "Second Floor Patio" has the meaning set out in Section 4.7B(g);
(jj) "Second Remainder Premises" means 39.2% of the remaining Usable Area
in the Building not leased or committed for lease as of February 1,
2002 and described in Column 1 in Section 2.1;
(kk) "Second Expansion Leased Premises" means the premises in the
Building and described in Column 1 in Section 2.1 and identified as
such on Schedule "A" hereto;
(ll) "Taxes" means the real property taxes (including local improvement
rates), licence fees, assessments, or other charges levied or
imposed by any provincial, municipal, school or other authority
against the Lands and Buildings or the Demised Premises;
(mm) "Term" means for each of the premises comprising the Demised
Premises, the respective period of time set out in Column 5 in
Section 2.1;
(nn) "Third Remainder Premises" means 40.2% of the remaining Usable Area
in the Building not leased or committed for lease as of February 1,
2002 and described in Column 1 in Section 2.1;
(oo) "Third Expansion Leased Premises" means the premises in the Building
and described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto; and
(pp) "Usable Area" means the usable area of the Demised Premises
calculated in accordance with the methods of measuring usable areas
as described in the Standard Method for Measuring Floor Area in
Office Buildings, ANSI Z65.1-1996, as promulgated by BOMA
International, except that "Usable Area in the Building" for the
definitions of First Remainder Premises, Second Remainder Premises
and Third Remainder Premises shall refer to all remaining Usable
Area in the Building that is not committed for lease as of
7
February 1, 2002, but excluding required common corridors and exits,
the existing room on the Cambie frontage immediately north of the
loading dock area, loading bays including the loading landings and
existing loading dock building operation rooms, common electrical
and telephone rooms and any additional common areas required by the
City building codes.
PART 2 - DEMISE AND TERM
2.1 Demise and Term
In consideration of the rents, covenants, conditions and agreements
hereinafter reserved and contained on the part of the Lessee to be paid,
observed and performed, the Lessor hereby demises and leases unto the
Lessee the Demised Premises on the terms and conditions contained in this
Lease:
(a) to hold the Demised Premises for and during the Term, unless sooner
terminated pursuant to the terms of this Lease, commencing on the
respective Commencement Dates and ending on the Expiry Date, as
follows:
------------------------ ----------------- ----------------- -------------- -----------
COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4 COLUMN 5
-------- -------- -------- -------- --------
PREMISES/RENTABLE AREA POSSESSION COMMENCEMENT EXPIRY TERM
(SQ. FT.) DATE DATE DATE
------------------------ ----------------- ----------------- -------------- -----------
9,183 -- 1st floor January 1, 2000 June 1, 2000 December 31, 14 years,
14,034 -- 2nd floor 2014 7 months
19,874 -- 3rd floor
(the "Initial Leased
Premises")
------------------------ ----------------- ----------------- -------------- -----------
11,234 -- 3rd floor August 1, 2000 December 1, 2000 December 31, 14 years,
(the "First Expansion 2014 1 month
Leased Premises")
------------------------ ----------------- ----------------- -------------- -----------
33,312 -- 1st floor January 1, 2001 April 1, 2001 December 31, 13 years,
(the "Main Floor 2014 9 months
Expansion Leased
Premises")
------------------------ ----------------- ----------------- -------------- -----------
12,380 -- 3rd floor April 1, 2001 July 1, 2001 December 31, 13
(the "Second Expansion 2014 years, 6
Leased Premises") months
------------------------ ----------------- ----------------- -------------- -----------
31,007 -- 3rd floor September 1, January 1, 2002 December 31, 13 years
(the "Third Expansion 2001 2014
Leased Premises")
------------------------ ----------------- ----------------- -------------- -----------
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------------------------ ----------------- ----------------- -------------- -----------
COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4 COLUMN 5
-------- -------- -------- -------- --------
PREMISES/RENTABLE AREA POSSESSION COMMENCEMENT EXPIRY TERM
(SQ. FT.) DATE DATE DATE
------------------------ ----------------- ----------------- -------------- -----------
approx. 21,000 -- on March 1, 2002 January 1, 2003 December 31, 12 years
either the 1st, 2nd or 2014
3rd floors as
determined by the
Lessee in its sole
discretion (the "First
Remainder Premises")
------------------------ ----------------- ----------------- -------------- -----------
approx. 40,000 -- on March 1, 2002 May 1, 2003 December 31, 11 years,
either the 1st, 2nd or 2014 8 months
3rd floors as
determined by the
Lessee in its sole
discretion (the
"Second Remainder
Premises")
------------------------ ----------------- ----------------- -------------- -----------
approx. 41,000 -- on March 1, 2002 October 1, 2003 December 31, 11 years,
either the 1st, 2nd or 2014 3 months
3rd floors as
determined by the
Lessee in its sole
discretion (the "Third
Remainder Premises")
------------------------ ----------------- ----------------- -------------- -----------
(b) notwithstanding the Possession Dates set out above, the Lessee
agrees to provide not less than ninety (90) days prior written
notice to the Lessor before the Lessee takes possession of any part
or parts of the Remainder Premises for the purpose of constructing
and installing Leasehold Improvements.
Subject to existing encumbrances and utility rights of way (whether
registered or unregistered), the Lessor also agrees that the Lessee is
entitled to the exclusive use of that exterior area (the "First Floor
Patio") of the Lands located adjacent to the first floor of the Building
beside the Initial Leased Premises, approximately as outlined in RED on
the floor plan annexed hereto as Schedule "A", provided that if such area
is used for the Lessee's parking, the terms and conditions of Section 7.4
will apply to such parking.
2.2 Readjustment
If the Rentable Area of the Demised Premises was estimated by or on behalf
of the Lessor for the purposes of this Lease because the Rentable Area
thereof could not be accurately calculated prior to the execution of the
Lease, or if the Rentable Area of the Demised Premises changes at any time
during the Term, then, when the Rentable Area of the Demised Premises can
be accurately calculated and if the estimate previously made was not
correct or has changed, the Rentable Area of the Demised Premises shall
then be calculated as provided herein and the appropriate adjustments made
with respect to Basic Rent payable under this Lease and to the definition
of Proportionate Share. The Lessor agrees that the area of the Remainder
Premises will be measured prior to the first Commencement Date for the
Remainder Premises.
9
PART 3 - RENT, TAXES AND OTHER CHARGES
3.1 Basic Rent
Subject to Section 7.5, the Lessee covenants and agrees to pay to the
Lessor in lawful money of Canada rent (the "Basic Rent") in the amount of:
(a) $12.50 per square foot of Rentable Area per annum of that portion of
the Demised Premises comprising the Original Premises from and as of
the respective Commencement Dates to and including December 31,
2007;
(b) $13.00 per square foot of Rentable Area per annum of that portion of
the Demised Premises comprising the Remainder Premises from and as
of the respective Commencement Dates to and including December 31,
2007; and
(c) $15.00 per square foot of Rentable Area per annum of the Demised
Premises from and as of January 1, 2008 to and including December
31, 2014.
3.2 Payment of Rent and Additional Rent
The Lessee shall pay Basic Rent in advance in equal monthly instalments
without set-off or deduction on the 1st day of each month during each year
of the Term to the Lessor, the first of such payments to be made on the
respective Commencement Dates, together with the following:
(a) goods and services tax attributable to Basic Rent;
(b) the Lessee's Proportionate Share of Operating Costs;
(c) payment for the parking stalls pursuant to Section 7.4;
(d) the monthly rent for the storage and emergency generator rooms
pursuant to Section 7.5; and
(e) any other Additional Rent.
3.3 Net Lease
It is understood and agreed that this Lease is a completely net lease to
the Lessor except as otherwise stated in this Lease. The Lessor is not
responsible for any costs, charges or expenses relating to the Demised
Premises, their upkeep, use, occupancy, contents, equipment, improvements
or the business carried on in them and the Lessee shall be responsible for
all such charges, impositions, costs and expenses, except as stated in
this Lease.
3.4 Rent
It is further understood and agreed that the term "Rent" as used in this
Lease shall include all Basic Rent, and all other costs, charges or
expenses relating to the Demised Premises or the Lands and Building which
are the responsibility of the Lessee hereunder and such other charges, if
any, shall be designated as Additional Rent.
10
3.5 Single Lease
For greater certainty the parties agree that, notwithstanding the
respective Commencement Dates for the portions of the Demised Premises,
this is a single lease in respect of the Demised Premises. Without
limiting the generality of the foregoing, a default by the Lessee in
payment of Basic Rent or a breach of any term with respect to a portion of
the Demised Premises is a breach of this Lease in respect of all of the
Demised Premises and the Lessor may exercise its rights and remedies
against the Lessee with respect to all of the Demised Premises.
3.6 Place of Payment
All payments of Rent shall be paid to the Lessor at the address shown on
page 1 or at such other address as the Lessor shall designate in writing.
3.7 Lessee's Payment of Taxes/Sales Taxes
(a) The Lessee covenants to pay to the Lessor upon written notice from
the Lessor, as Additional Rent hereunder, its Proportionate Share of
Taxes. The Lessee with the prior written consent of the Lessor, such
consent not to be unreasonably withheld or delayed, may, at its own
expense, contest any Taxes and appeal any assessments with respect
to the Land, Building and the Demised Premises, provided all
penalties, interest and other costs arising out of such actions are
to be paid for by the Lessee (unless the Lessee is successful and in
such event such costs are to be included in Operating Costs).
(b) The Lessee shall pay Sales Taxes whether they are characterized as a
goods and services tax, sales tax, value-added tax, multi-stage tax,
business transfer tax or otherwise with the intent that the Lessor
be fully indemnified in respect of all Sales Taxes payable or
collectible in respect of the Rent payable in respect of this Lease
or the Demised Premises. Sales Taxes payable by the Lessee will be
calculated by the Lessor in accordance with the applicable
legislation.
3.8 Rental for Irregular Periods
If the Term of this Lease expires before the end of any calendar year with
respect to which Additional Rent is payable under this Lease, the Lessee
shall pay its Proportionate Share of such Additional Rent based upon the
number of days of the term of this Lease within such year, and the Lessee
shall pay such Additional Rent upon demand, notwithstanding that the term
of this Lease may have expired at the time of such demand.
3.9 Estimate of Additional Rent
It is agreed that the Lessor may estimate the amount of Additional Rent
for each year and upon notice from the Lessor, the Lessee shall pay the
amount so estimated in instalments of such amount or amounts and at such
time or times as the Lessor shall determine, including but without
limiting the generality of the foregoing, on the 1st day of each and every
month of the Term. Within thirty (30) days after determination of the
actual amount of the Additional Rent for which the Lessee is responsible,
there shall be an appropriate adjustment between the Lessor and the Lessee
so that the total amount paid by the Lessee pursuant to this Section in
advance or by instalments or otherwise does not exceed the actual amount
of Additional Rent for which the Lessee is responsible in respect of the
year for which the Lessee made advance or instalment payments.
Notwithstanding the foregoing, nothing in this Section 3.9 shall be
interpreted to require the Lessee to prepay estimated Taxes more than
thirty (30) days prior to the date(s) on
11
which such tax payments are payable to the taxing authority, provided that
the Lessee covenants and agrees that a default in paying the estimated
Taxes, upon not less than five (5) days' notice from the Lessor, at least
thirty (30) days prior to such date(s) provides to the Lessor the same
remedies as a default in the payment of Rent. The Lessor shall forward to
the Lessee a copy of each statement of the Taxes issued by the City of
Vancouver within ten (10) days of receipt.
3.10 Reporting and Audit of Additional Rent
(a) For the period up to December 31, 2002, the Lessor shall deliver to
the Lessee within one hundred and twenty (120) days after the end of
each fiscal year a written statement setting out in reasonable
detail the actual amount of Additional Rent for such fiscal year and
the statement shall be audited if requested by the Lessee within one
hundred and twenty (120) days of receipt of such statement at the
Lessee's expense (unless such audit determines that the Lessor has
overcharged the Additional Rent by more than 3%, and in such event,
solely at the Lessor's cost) by a certified chartered accountant of
the Province of British Columbia. The Lessee, at its option and
cost, shall be permitted to review such audited statement with the
Lessor's auditor upon providing at least fourteen (14) days' prior
notice to the Lessor.
(b) For the period from January 1, 2003 until the expiry of the Term and
any renewals thereof, the Lessor shall deliver to the Lessee within
one hundred and twenty (120) days after the end of each fiscal year
a written audited statement setting out in reasonable detail the
actual amount of Additional Rent for such fiscal year prepared by a
certified chartered accountant of the Province of British Columbia.
The Lessee agrees that the cost of having the statement of
Additional Rent audited will be a cost payable by the Lessee within
fifteen (15) days of delivery of the account. The Lessee, at its
option and cost, shall be permitted to review such audited statement
with the Lessor's auditor upon providing at least fourteen (14)
days' prior notice to the Lessor.
PART 4 - ACCEPTANCE AND FIXTURING OF DEMISED PREMISES
4.1 Lessee Loan for the Original Premises (Except for the Main Floor Expansion
Leased Premises)
[Intentionally Deleted]
4.2 Leasehold Improvements
[Intentionally Deleted]
4.3 HVAC Inducement
As an inducement for the Lessee agreeing to execute this Lease, the Lessor
shall pay to the Lessee $8.00 (plus applicable goods and services tax
("GST")) per square foot of the Usable Area of the Original Premises
(except for the Main Floor Expansion Leased Premises) towards the cost of
installing a new HVAC system for the Demised Premises as designed by the
Lessee's consultants. Such inducement shall be payable on the applicable
Commencement Dates for the Original Premises. If required by the Lessee
for additional equipment to service the Demised Premises, the Lessor shall
provide the Lessee during the Term and any renewal thereof (save and
except a renewal pursuant to section 17.1(b)) with exclusive use of, and
unrestricted access to, an area on the north half of the Building's roof
designated by the Lessor, having an area approximately equal to the area
occupied by the Lessee's HVAC equipment on the south half of
12
the Building's roof, free of Rent, for the housing of the Lessee's
equipment. The Lessee shall have the use of, and unrestricted access to,
the existing area on the south half of the Building's roof housing the
Lessee's HVAC equipment, free of Rent during the Term of this Lease and
any renewals thereof. The Lessor confirms that the Lessee may, at its
cost, construct an enclosure surrounding the Lessee's equipment within
each of the areas provided for the Lessee's use pursuant to this Section.
The Lessee will have unrestricted access at all times to its equipment.
The Lessor will be solely responsible on a non pass-through basis for any
required modifications to existing HVAC units serving, or installing any
new HVAC units required to serve, other tenants in the Building, save and
except that if the Lessee exercises its right to renew pursuant to Section
17.1(b), the Lessee covenants and agrees that, notwithstanding anything
herein to the contrary, during any such renewal period the Lessor shall be
entitled to use the existing and any future HVAC units installed by the
Lessee for the use and benefit of other tenants in the Building in a
manner in keeping with a Class B professional office building provided the
HVAC units continue also to service those parts of the Demised Premises
which are renewed by the Lessee, and the maintenance and repair of such
HVAC units is wholly assumed by the Lessor as an Operating Cost.
4.4 Early Occupation by Lessee
Subject to Force Majeure and to Section 2.1(b) of this Lease, the Lessee
shall be entitled to have access to the Demised Premises for the purpose
of planning and constructing its Leasehold Improvements on the applicable
Possession Dates. During any period prior to a Commencement Date (being
the fixturing period from the Possession Date to a Commencement Date) in
which the Lessee is permitted to have occupancy of premises forming part
of the Demised Premises, whether exclusively or in common with the Lessor,
its contractors, sub-contractors or employees, and with respect to such
premises, the Lessee shall be bound by all the provisions of this Lease
other than those requiring payment of Rent. If the Lessor is unable to
substantially complete demolition of a part or parts of the Remainder
Premises (excepting any areas left undemolished to maintain the Lessee's
exit corridors to exit stairwells) by a date which is at least four (4)
months prior to an applicable Commencement Date, then the applicable
Commencement Date will be extended by a period equivalent to the period of
delay.
4.5 As Is/Lessee's Alterations
The Lessee confirms that it is leasing the Demised Premises on an "as is"
basis with the exception of Lessor's Repairs/Work. Any alterations the
Lessee wishes to carry out to the Demised Premises shall comply with the
terms of this Lease and the Lessee shall obtain any applicable approvals
from the City of Vancouver and of the Lessor's architects, mechanical,
electrical and structural consultants, at the Lessee's cost. The Lessee
agrees to review all building permit applications with the Lessor or
Lessor's consultants prior to submittal of same to the City of Vancouver,
and to amend said permits as reasonably required by the Lessor to ensure
that only expenditures which must be listed are included in the
application, which applications the Lessor agrees to review without delay.
The Lessee will prepare and submit to the Lessor for the Lessor's written
approval, such approval not to be unreasonably withheld or delayed, all
plans and specifications for the proposed Lessee's work and fixturing for
the Demised Premises. The Lessor acknowledges that the Lessee's
alterations will result in building code upgrades being required to the
Building for which the Lessor will be solely responsible, and agrees that
the extent, type or cost of such upgrades will not be reason for the
Lessor to object to any alterations proposed by the Lessee (i.e. the
Leasehold Improvements are anticipated to be comparable to the Lessee's
improvements at 000 Xxxxxx Xxxxxx, and to include one internal stairwell
connecting the first floor, second floor and third floor of the Building
and a data systems centre).
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4.6 Restrictions on Construction Activity
(a) The Lessor and Lessee acknowledge that part or parts of the Lessor's
Repairs/Work and Lessee's tenant improvement work are likely to be
disruptive, and that construction activity that causes excessive
noise, structural vibration, odour or compromised air quality over
or close to occupied space are likely to create unreasonable levels
of disruption. For greater clarification but without limitation, the
Lessor acknowledges that xxxx hammering, hammer drilling and
concrete vibration (or other activities creating similar levels of
noise or vibration) during business hours south of the Building
expansion joint are likely to cause unreasonable disruption to the
Lessee, and the Lessee acknowledges that xxxx hammering, hammer
drilling and concrete vibration (or other activities creating
similar levels of noise or vibrations) during business hours north
of the Building expansion joint are likely to cause unreasonable
disruption to other occupants and tenants of the Building.
Accordingly, the Lessor and Lessee agree that:
(i) construction activities which are likely to cause unreasonable
disruption to the Lessee or other occupants and tenants of the
Building will be scheduled for non-business hours, being prior
to 8:00 a.m. and after 5:00 p.m. on weekdays, and at any time
on Saturdays, Sundays and statutory holidays; and
(ii) construction activities initiated during business hours which
prove to cause unreasonable disruption to the Lessee or other
occupants or tenants of the Building will be curtailed
immediately (or as soon as reasonably possible if, due to the
nature of the construction activity, it cannot be stopped
immediately without unreasonable commercial consequences) upon
verbal notice from either the Lessee or the Lessor, and
re-scheduled for the aforementioned non-business hours.
(b) The Lessor and Lessee acknowledge that some construction noise may
occur during business hours that is audible in occupied areas. The
intent of this provision is to eliminate unreasonable or excessive
disruption to the business of the Lessee and other occupants and
tenants of the Building during business hours.
(c) Each of the Lessor and the Lessee also agree to designate a
representative who will be available at all times to deal with
construction complaints and issues.
(d) Each of the Lessor and the Lessee agree that within thirty (30) days
of the effective date of this Lease, each will prepare and send to
the other a construction schedule setting out in detail a timetable
as to when each part or stage of their respective work is estimated
to be completed. Upon receipt of the schedules, each of the Lessor
and the Lessee will then, acting reasonably, approve to any
revisions to the schedule of dates from time to time as may be
appropriate.
4.7 Lessor's Repairs/Work for the Original Premises (Except for the Main Floor
Expansion Leased Premises)
The Lessor shall, at its cost, provide only those repairs and improvements
detailed as follows, unless otherwise provided in this Lease:
14
(a) Electrical Service. The existing electrical room and a 120/208V
distribution centre on the first floor of the Building provided by
the Lessor within the Demised Premises;
(b) Lighting Inducement. The Lessor agrees to provide to the Lessee an
inducement in an amount equal to $4.00 per square foot of the
Rentable Area of the Original Premises (less the Main Floor
Expansion Leased Premises), plus GST, towards the cost of lighting,
such inducement to be paid to the Lessee within thirty (30) days of
completion of the installation of the lighting by the Lessee in an
area or areas of the Original Premises less the Main Floor Expansion
Leased Premises;
(c) Location for Lessee's Emergency Power Equipment. As agreed to by the
Lessor and the Lessee as of the date of this Lease;
(d) Demolition. Demolition including removal of all interior partitions
to underside of structure, the removal of resilient and carpet
flooring, and the removal of the t-bar ceilingS and lighting.
Existing washrooms are to remain. Subject to Force Majeure, the
Lessor shall carry out it's demolition work pursuant to the terms of
this Lease within ninety (90) days of receipt of written notice from
the Lessee requesting demolition for no more than 40,000 square feet
of space, and proportionately longer notice for an area greater than
40,000 square feet. Notwithstanding the foregoing, the Lessor may
carry out any demolition work at any time and in any location
without receiving prior notice from the Lessee, provided the Lessor
provides prior notice to the Lessee;
(e) Window Coverings. Building compatible standard window coverings
throughout (which are to be venetian blinds, colour and type to be
selected by the Lessee) are to be provided for all exterior windows;
(f) Windows. Twelve (12) linear feet by five (5) feet of exterior window
in each full exterior bay of the Original Premises, with the
exception of where exterior wall washrooms are located, the two (2)
bays on the second floor fronting on Mainland Street, and where
stairwells or other impediments makes the installation of exterior
windows impractical. All existing windows will be replaced with new
windows measuring twelve (12) linear feet by five (5) feet (the
existing windows are twelve (12) feet by approximately three (3)
feet);
All of the work described above shall be completed by the Lessor to a
building standard consistent with a Class B professional office building
and shall encompass the specific reasonable requirements of the Lessee.
The Lessee and the Lessor agree that contractors for each of the Lessee
and the Lessor may undertake work within the Demised Premises
concurrently.
4.7A Lessor's Repair/Work for the Main Floor Expansion Leased Premises
The Main Floor Expansion Leased Premises are leased by the Lessee on an
"as is where is" basis. Notwithstanding the foregoing, the Lessor shall,
at its own cost, provide those repairs and improvements for the Main Floor
Expansion Leased Premises detailed as follows:
(a) Demolition. Demolition of all interior partitions (excluding the
washrooms) and removal of flooring coverings and the T-bar ceiling.
The Lessor's demolition rights set out in section 4.7 apply mutatis
mutandis to the Main Floor Expansion Leased Premises.
(b) New Demising Walls. Construction of demising walls consistent with
the demising walls constructed by the Lessor for the Initial Leased
Premises.
15
(c) Windows. Installation of four exterior windows along Xxxxxx Street
and five exterior windows along Mainland Street, each placed in the
middle of exterior bays. Exterior windows installed along the Xxxxxx
Street frontage will have approximately the same sill heights as
those installed for the Lessee on the second floor and will measure
approximately twelve (12) feet wide by six (6) feet high. Some or
all of any exterior windows installed on the Mainland Street
frontage will have sill heights higher than those installed on the
second floor, and the vertical dimension of the windows will start
at approximately five (5) feet and decrease somewhat moving towards
the middle of the Building on Mainland Street.
The Lessor and the Lessee agree that contractors for each of the Lessee
and the Lessor may undertake work within the Main Floor Expansion Leased
Premises concurrently. Notwithstanding the foregoing, the Lessee
acknowledges that dry-xxxxxxx and taping of new demising walls cannot
commence until the Lessee's contractor completes electrical and
communications work in said new walls. Therefore the Lessee agrees that
the delays suffered by the Lessor in the completion of dry-xxxxxxx and
taping of the new demising walls (collectively the "Crystal Dependant
Work") as a result of delays in the Lessee's electrical work or
communications work, shall not result in an extension of the Commencement
Date provided that the Lessor carries out the Crystal Dependent Work in a
reasonable time period upon being in a position to do so.
4.7X. Xxxxxx'x Repair/Work for the Remainder Premises
The Lessor agrees, that in consideration for the Lessee agreeing to lease
the Remainder Premises, the Lessor has agreed to substantially repair and
renovate the Building from its current use as a multi-tenant facility for
showmart tenants into a Class B professional office building. The Lessor
will proceed expeditiously, using reasonable commercial efforts, to
complete this work as soon as reasonably possible, subject to Force
Majeure. The Lessor shall, as its own cost (and not to be included in
Operating Costs, except that following initial construction, repairs and
maintenance will be included in Operating Costs except for structural
defects which are the responsibility of the Lessor) provide those repairs
and renovations to the Remainder Premises, and to the Building as
specifically provided herein, which are detailed as follows:
(a) Hydro Capacity. Prior to December 31, 2002, the Lessor will upgrade
the Building with sufficient hydro capacity to provide the Lessee
with access to not less than 12 xxxxx per square foot of Usable Area
leased by the Lessee.
(b) Roof Membrane. The Lessor will replace the roof membrane and wearing
surface on the top level of the Building. The Lessee acknowledges
that this replacement work has already been completed by the Lessor
underneath the new HVAC units on the Building's roof. The Lessor
intends to commence this work in the spring of 2002 at the north end
of the Building and to complete this work in the late summer or
early fall, including the occupied south portion of the roof deck,
subject to Force Majeure. The Lessor agrees that it will be solely
responsible for the cost (including, without limitation, lost
revenue on effected parking stalls), of decommissioning old HVAC
units, inserting skylights/lightwells as contemplated by Section
4.7B(f), and for any changes to the rooftop configuration made by
the Lessor. The Lessee recognizes that the Lessor must comply with
the City of Vancouver parking provisions and bylaws.
(c) Exterior Building Finish. Subject to City approval and City required
modifications, if any, the Lessor will refinish the exterior walls
of the Building substantially based upon the design approved by the
Lessor and the Lessee in writing, a copy of which is attached
16
to this Lease as Schedule "D". Any changes to such design requested
by the Lessee will be subject to the approval of the Lessor (such
approval not to be unreasonably withheld), and to City approval, and
any significant extra cost incurred by the Lessor directly as a
result of such changes requested by the Lessee will be at the cost
of the Lessee (the Lessor hereby agreeing that minor changes having
a cost in aggregate of less than $5,000 will be taken care of by the
Lessor). New exterior lighting will be incorporated into the design.
(d) Demolition. The Lessor will demolish existing interior drywall
partitions, remove existing floor coverings, remove all unnecessary
ducts, conduits and piping (except for sprinklers) and remove
interior finish on exterior walls throughout the Remainder Premises.
The Lessor's demolition rights set out in section 4.7 apply mutatis
mutandis to the Remainder Premises.
(e) Building Access Security System. The Lessor agrees to retain a
contractor or consultant to design and implement an access and
security system (the "System") covering common areas of the Building
and the Lessor and the Lessee will, acting reasonably, agree on the
appropriate components to be included within the System. Card access
will be provided at the Main Entry on Mainland Street, the roof
entrance above the main building entrance, and in the passenger
elevator adjacent to the main building entrance. If feasible, said
card access will be an extension of the Lessee's own access system.
In addition, security cameras will be installed in the loading dock
area, at the bottom of any common stairwells that are accessible to
the public from the street level, and at the entrance point to the
roof parking. Said cameras will be monitored by the Lessee from
within the Demised Premises, it being agreed that the Lessor shall
indemnify the Lessee and save it harmless from any liability which
may arise as a result of the presence of security cameras, a lack of
effectiveness either as a result of defects in the equipment or
insufficient monitoring, and this indemnity shall be included within
the Lessor's indemnity described in Section 10.2 of this Lease. It
is agreed that the Lessor shall be responsible for the cost of
initially installing the System and any subsequent costs for
maintenance, replacement or upgrade to the System shall form part of
the Operating Costs.
(f) Skylights and Lightwells. Subject to City approval and satisfying
City of Vancouver parking stall requirements, the Lessor agrees to
install and construct two (2) skylights and lightwells to the second
floor from the rooftop parking deck in locations to be mutually
agreed upon, both parties acting reasonably. The Lessor agrees to
maximize the size of the skylights and lightwells within four
adjacent columns it being agreed that the Lessor will not remove the
second floor roof slab past the line of the column drop panels
supporting the slab. The Lessor's responsibilities will be limited
to cutting and removing the second and third floor roof slabs,
related slab reinforcement if structurally required so that there is
no material impact on the current seismic rating of the Building,
roof membrane repairs, and the provision and installation of the
skylights. The Lessor will complete this work as part of the roof
membrane replacement described in paragraph (b) above.
(g) Patio Inducement. The Lessor agrees that the Lessee may construct a
patio (the "Second Floor Patio") on the second floor parking deck
facing Xxxxxx Street approximately in the area shown on Schedule "A"
hereto comprising a space of approximately 2,500 square feet. The
Lessor agrees to provide the Lessee with an inducement of $20,000.00
plus GST (the "Patio Inducement") towards the cost of constructing
the Second Floor Patio. The Patio Inducement will be paid to the
Lessee upon substantial completion of the
17
Second Floor Patio. Construction of the Second Floor Patio is
subject to approval by the City of Vancouver. Provided the Second
Floor Patio is approved by the City of Vancouver and constructed by
the Lessee, no parking will be permitted by the Lessor within such
space, and exclusive use of the Second Floor Patio shall be provided
to the Lessee at no charge during the Term and any renewals thereof.
The Lessor also agrees that it will replace the roof railings with
metallic coloured railings and the ramp railings will have
perforated infill panels installed, also with a metallic finish, all
subject to City approval.
(h) Washroom Inducement. The Lessor will provide an inducement to the
Lessee up to a maximum of $15,000.00 (plus GST) per existing
washroom in the Remainder Premises towards their repair and
refinishing, such inducement to be paid to the Lessee as at the date
the repairs and refinishing to an existing washroom are
substantially complete.
(i) Electrical, Mechanical and Lighting Inducement. The Lessor agrees to
provide to the Lessee an inducement (the "EML Inducement") in an
amount equal to $10.50 per square foot of the Rentable Area of the
Remainder Premises (plus GST) towards the cost of electrical,
mechanical and lighting replacements only, such inducement to be
paid to the Lessee on the Commencement Date of the applicable
portion of the Remainder Premises. The Lessee agrees to install
electrical, mechanical and lighting replacements (the "EML
Improvements") in the Remainder Premises of a quality consistent
with those installed by the Lessee in the Original Premises and
having a value of not less than the amount of the EML Inducement.
The Lessee further agrees that the EML Improvements will be
installed by the Lessee on or before July 1, 2004, and if not
installed by such date, the Lessee agrees to refund the EML
Inducement to the Lessor forthwith.
(j) Main Entry.
(i) The Lessor agrees to renovate and refinish the main entry to
the Building (the "Main Entry"). The Lessor will replace the
vertical portion of the glass atrium and entrance doors as
part of its exterior work, provide a new elevator cab in the
existing shaft adjacent to the Main Entry with finishes
consistent with those to be installed in the Main Entry, and
complete handicap access along with sufficient heating and
electrical for this space. The Lessor also agrees to supply
and install new finishes to the Main Entry interior including
new handrails of a quality consistent with those installed in
the Lessee's existing interior stairwell, wall finishes, floor
finishes, drywall ceiling treatments with recessed lighting,
new interior glazing, drywall applied under the stair risers,
and replacement of nine (9) existing fire doors leading from
the Main Entry into the Building (the "Refinishing Work"). The
Lessor will be responsible for the cost of the Refinishing
Work up to a maximum of $175,000. The Lessee agrees to prepare
drawings and specifications for the Refinishing Work within
thirty (30) days of the effective date of this Lease. The
Lessor will complete the Refinishing Work and should the cost
thereof exceed the budget of $175,000, then the excess cost
will be reimbursed by the Lessee to the Lessor forthwith. The
Lessee will be exclusively entitled to the use of the Main
Entry, subject only to the right of the Vancouver English
Centre, their successors or assigns, or other tenants leasing
the Remainder First Floor Premises to use the Main Entry as an
emergency exit and for handicap access, if required, and that
in the event of a fire alarm the Main Entry stairwell is
required for exiting from the roof parking level.
18
(ii) The Lessor represents to the Lessee that to its information
and belief cooling will not be required for the Main Entry in
order to maintain in the Main Entry conditions of reasonable
temperature and comfort during normal business hours in
accordance with good standards of interior climate control
consistent with the standards expected within a Class B
professional office building. The Lessor agrees that if
cooling is required in the Main Entry to consistently
maintain reasonable temperatures during business hours, or if
reasonable temperatures (eg. 72(degrees) F) are not
maintained in the Main Entry when the doors from the Demised
Premises into the Main Entry are closed and as a consequence
the resources of the Lessee's HVAC system must be expended to
adjust temperatures in the Main Entry when the doors into the
Main Entry are opened during normal business hours, then, in
such event, the Lessor will at its own expense, install
appropriate cooling equipment or otherwise rectify the
problem to the satisfaction of the Lessee, acting reasonably.
(k) Demising. [Intentionally Deleted]
(l) Windows. The Lessor agrees to install exterior windows in the
Remainder Premises. Windows shall be approximately twelve (12)
linear feet by five (5) feet high in the middle of full exterior
bays, with the exception of where exterior wall washrooms are
located, where stairwells or other impediments make the installation
of exterior windows impractical, and in second floor exterior bays
where the vehicle ramp partially or completely passes by said
exterior bays. The Lessee acknowledges and agrees that certain
exterior windows installed by the Lessor can have larger dimensions
than those specified herein. All existing exterior windows in the
Demised Premises that have not already been replaced will be
replaced;
(m) Common Areas. The Lessor will refinish the following common areas
within the Building to a standard consistent with a Class B
professional office building: refinish the easterly elevator cab
interior; re-drywall and paint the lobby entrance off the parkade
for the westerly elevator; replace the flooring in the westerly
elevator; replace 3rd floor entry doors by the back elevator;
re-drywall, paint and replace the flooring in the entrance lobby off
the parkade for the easterly elevator; repaint common stairwells and
replace lighting, if required, as agreed between the parties, each
acting reasonably; refinish common secondary entrances, if required,
as agreed between the parties, each acting reasonably, and refinish
the common area off the easterly elevator within the Building; and
construct and finish the common hallway on the first floor running
east to west from the main entrance (the first floor lobby area in
front of the westerly elevator shall have flooring consistent with
the flooring installed in the Main Entry and t-bar ceilings with
recessed lighting and the long corridor running between the two
elevator lobbies shall have open ceilings with suspended lighting,
painted walls and a sealed concrete floor).
4.8 Cash Inducement in Lieu of Lessor's Repairs/Work
[Intentionally Deleted]
4.9 Allowances for Leasehold Improvements
The Lessor agrees to provide to the Lessee the following allowances which
are to be paid to the Lessee on or before the earlier of June 1, 2000 or
the date the costs have been incurred for the following work (as evidenced
by invoices), provided this Lease has been executed by the Lessee and no
liens are registered against title to the Lands pertaining to the
Leasehold Improvements:
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(a) the sum of $32,000.00 (plus GST) to be applied by the Lessee to
upgrade four washrooms located within the Initial Leased Premises;
and
(b) the sum of $37,500.00 (plus GST) to be applied by the Lessee to
construct a corporate entrance for the Demised Premises.
The Lessee acknowledges that the Lessor will be solely entitled to the
applicable input tax credit in respect of such payments.
4.10 Lessor's Seismic Upgrading
The Lessor shall, at its own cost, seismically upgrade the Building in
conjunction with completion of the exterior Building finishes to achieve
not less than 88% of the current Vancouver building bylaw seismic
requirements in both directions. The Lessor represents that:
(a) the sheer wall portion of this work is intended to be completed by
February 28, 2002; and
(b) the balance of the seismic work consists of the application of
reinforcement to certain exterior walls, and will be completed when
exterior windows are installed or replaced in applicable areas of
the Building.
The Lessee acknowledges that certain Lessee improvements which are to be
installed by the Lessee (and not the Lessor) may negatively impact the
level of seismic compliance designed by the Lessor, in which event the
Lessee shall be responsible, at its cost, for ensuring that said
improvements are designed in a manner that maintains the Lessor's designed
seismic compliance.
4.11 Deferment of Lessor's Repairs/Work on First Expansion Premises
Improvements
[Intentionally Deleted]
4.12 Responsibility for Repairs/Work to Base Building Systems
The Lessor agrees that notwithstanding any other provision of this Lease,
the Lessor shall be responsible for the repair and maintenance of all
common base building systems which are included within the Demised
Premises (including, without limitation, rain water leaders, conduits or
wiring serving the common areas, and the sprinkler system mains), but that
the costs of such repairs will be included in Operating Costs. The Lessor
shall not be responsible for any systems installed by the Lessee.
4.13 Warranties on Leasehold Improvements
At the termination or earlier expiry of the Term or any renewal thereof,
the Lessee agrees to assign to the Lessor any outstanding warranties with
respect to the Leasehold Improvements, to the extent that they are
assignable.
PART 5 - CONDUCT OF BUSINESS
5.1 Permitted Use
The Lessee shall not use or permit the Demised Premises or any part
thereof to be used for any purpose other than for general administrative
and field support office use associated with any
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software and computer engineering or development company or any other
legally permitted use compatible with office buildings of comparable
quality and approved in writing by the Lessor, such approval not to be
unreasonably withheld or delayed. It is agreed that it shall not be
unreasonable for the Lessor to withhold approval of a use which in the
Lessor's reasonable opinion is not compatible with a professional office
building. The Lessor hereby approves any sublease of a portion of the
Demised Premises for use as a coffee bar/restaurant, provided that
municipal approvals and permits are obtained.
5.2 Waste and Nuisance
The Lessee shall not commit or suffer to be committed any waste upon the
Demised Premises or any nuisance in or on the Demised Premises. The Lessee
agrees that the Lessor may determine, acting reasonably, if any such state
or condition exists. The Lessor acknowledges and agrees that the Lessee
shall have the right to maintain a kitchen in the Demised Premises. The
Lessee shall take all necessary steps to ensure that no odours escape from
the Demised Premises into any other areas of the Building, including other
tenants' premises.
5.3 Tidy Condition/Compliance With Laws
The Lessee, at the end of each business day, shall leave the Demised
Premises in a clean and tidy condition and shall be responsible for all
janitorial services within the Demised Premises. The Lessee shall comply
with all provisions of law governing the conduct of their business and
their use of the Demised Premises including, without limitation, federal,
provincial and/or municipal regulations which relate to the partitioning,
equipment operation and use of the Demised Premises, and the making of any
repairs, replacements, alterations or changes to the Demised Premises, and
shall comply with all police, fire and sanitary regulations imposed by any
duly constituted authority or regulations made by the Lessor or fire
insurance underwriters, and shall observe and obey all governmental and
municipal regulations and other requirements governing the conduct of any
business conducted in or upon the Demised Premises, provided such
compliance, observation or abeyance is made necessary by an act or
omission of the Lessee or by those for whom the Lessee is responsible at
law, or by the nature of the Lessee's business or by the manner in which
the Lessee conducts its business.
5.4 Environment Warranty - Lessee
The Lessee represents and warrants that to its knowledge it does not
utilize any Hazardous Substances in its operations and the Lessee
covenants, warrants and agrees with the Lessor that it will not bring
Hazardous Substances onto the Demised Premises. The Lessee further
covenants and agrees to indemnify the Lessor and its directors, officers,
employees, agents, successors, and assigns from any and all liabilities,
actions, damages, claims, remediation cost recovery claims, losses, costs,
orders, fines, penalties, and expenses whatsoever (including all legal and
consultants' fees and expenses and the cost of remediation of the Demised
Premises and any adjacent property) arising from or in connection with:
(a) any breach of or non-compliance with the provisions of this Section
by the Lessee; or
(b) the release of any Hazardous Substances at or from the Demised
Premises related to or as a result of the use and occupation of the
Demised Premises or any act or omission of the Lessee or any person
for whom it is in law responsible.
The obligations of the Lessee under this Section shall not survive the
expiry or earlier termination of this Lease.
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5.5 Signs
The Lessee may install exterior Building signage and lobby and floor
directory signage of a kind and size, and affixed or installed in a manner
approved in writing by the Lessor (such approval not to be unreasonably
withheld or delayed) and subject to the prior approval of the City of
Vancouver where required. The Lessee shall also have the exclusive tenant
identity related signage rights to the Building throughout the Term and
any renewal thereof, subject only to the limited Smithe Street signage
rights held by the Vancouver English Centre, the approval by the Lessor of
the design and location of such signage, and to approval by the City of
Vancouver where required.
5.6 Payment of Lessee's Expenses
The Lessee shall pay promptly all business taxes, license fees, charges,
telephone, garbage and utilities bills, taxes, sales taxes, value added
taxes, duties and assessments now charged or to be charged in respect of
the Lessee, the Basic Rent, Additional Rent, the business carried on by
the Lessee and/or any installation made in or upon or any alteration or
improvements made in or to or any moveable property brought on the Demised
Premises and in particular fixtures, machinery and similar things of a
commercial or industrial undertaking and to reimburse the Lessor to the
extent and on account of any increase by way of insurance rate, taxes or
rates levied by any municipal, public or governmental authority payable by
the Lessor (other than Taxes which are governed by Section 3.7) if such
increase is the direct or indirect result of anything done or omitted by
the Lessee contrary to the provisions and covenants contained herein, or
that is a result of any installation, alteration or improvement made in or
upon the Demised Premises by the Lessee or any assignee, sub-lessee,
invitee or licensee of the Lessee.
PART 6 - REPAIRS
6.1 No Obligation to Repair/Replace
The Lessor shall be under no obligation to repair, maintain or replace the
Lessee's installations, HVAC systems servicing the Demised Premises,
alterations, additions, partitions and fixtures or anything in the nature
of a leasehold improvement made or installed by or on behalf of the
Lessee.
6.2 Repairs by Lessee
The Lessee shall repair and maintain the Demised Premises and the
Leasehold Improvements, and, without limitation, the HVAC equipment,
plumbing, electrical equipment and all other utilities and facilities
servicing the Demised Premises as would a careful owner, including glass
(excepting exterior windows), locks and doors of the Demised Premises and
shall leave the Demised Premises in good repair, including interior
painting if such painting is required because of damage done by the Lessee
to the Demised Premises, reasonable wear and tear excepted. The Lessee
shall permit the Lessor to enter during normal business hours (except in
the case of emergency, in which case the Lessor may enter at any time
without notice) to view the state of repair and the Lessee shall repair
according to notice in writing; PROVIDED HOWEVER, damage by fire,
lightning and tempest and other casualty against which the Lessor is
insured and structural repairs to the Building, including the roof and
outside walls thereof, are expressly excepted from this covenant of the
Lessee to repair. Except as otherwise provided for in this Lease, it is
agreed by and between the parties hereto that mechanical, electrical,
plumbing and
22
other repairs to the base systems and structure of the Building shall be
carried out by the Lessor and not by the Lessee, save and except for the
Leasehold Improvements and damage done or caused by the Lessee or its
agents, contractors, employees, licensees or invitees and save and except
for damage from improper installation of fixtures installed by or on
behalf of the Lessee.
6.3 Damage by Lessee
If the Demised Premises or any part of the Building shall be damaged or
destroyed through negligence, carelessness or misuse by the Lessee, its
servants, agents, employees, invitees or anyone permitted by it to be in
the Demised Premises, all costs and expenses of the necessary repairs,
cleaning, replacements or alterations resulting therefrom shall be borne
by the Lessee, and shall be paid by the Lessee to the Lessor forthwith on
demand as Additional Rent.
6.4 Building Compliance/Ordered Upgrades
The Lessee acknowledges that the condition of the Building is currently
designated as "Legal, Non-Conforming" by the City of Vancouver. Any
upgrades to the Demised Premises and/or Building including building
systems ordered by the City of Vancouver as a result of the Lessor's
Repairs/Work or the Leasehold Improvements that have received prior
approval by the Lessor, or any other regulatory body having jurisdiction
over the Building, during the Term (but not as a result of any Leasehold
Improvements constructed or installed by the Lessee during any renewal
thereof) shall be at the sole cost and expense of the Lessor. The Lessor
agrees that in the event the Lessor is required by the City or other
governmental authority to complete upgrades to the Building and such work
materially disrupts the Lessee's operations, Rent will xxxxx for such
period of time and with respect to such portion of the Demised Premises as
are affected by such disruption.
6.5 Alterations
The Lessee shall not cause or permit to be caused any waste or damage,
disfiguration or injury to the Demised Premises or the Building or the
fixtures and equipment thereof or cause or permit to be caused any
overloading of electrical or other systems of the Building or the floors
thereof; and not place therein any safe, heavy business machine, or other
heavy thing, without first obtaining the express consent in writing of the
Lessor. The Lessee shall not make or permit to be made any alterations,
additions or improvements to the Demised Premises or the Building systems
or any part thereof without first obtaining the prior express consent in
writing of the Lessor, and without using contractors or other qualified
workmen first designated or approved by the Lessor in writing, such
consent not to be unreasonably withheld or delayed. Notwithstanding the
foregoing, the Lessee shall be entitled to make any non-material
alterations, installations or renovations to the Demised Premises without
the consent of the Lessor provided the Lessee gives written notice to the
Lessor that such work will be performed.
6.6 Increase in Insurance
The Lessee shall pay to the Lessor the amount of the increase for any
insurance coverage to the extent that such increase is directly
attributable to any action by the Lessee under this Lease, and the Lessee
covenants that such insurance shall not thereby be made liable to
avoidance or cancellation by the insurer by reason of such alterations,
additions or improvements.
23
6.7 Plans and Specifications
The Lessee when requesting the Lessor's consent to said alterations,
additions or improvements, shall submit to the Lessor five (5) copies of
all plans and specifications for said alterations, additions or
improvements. Such plans and specifications shall include but not be
limited to details of architectural, electrical, mechanical, heating,
ventilating and air conditioning and plumbing work and such other items
and information as the Lessor may reasonably require, all as drawn to
scale. Plans and specifications shall include dimensions, materials and
colour and texture specifications and colour chips where appropriate. All
reasonable costs, expenses and fees of the Lessor incurred in respect to
such work shall be paid as Additional Rent by the Lessee on demand.
6.8 Non-compliance
In the event that the Lessor determines that any alterations, additions or
improvements made to the Demised Premises or the Building systems serving
the Demised Premises do not comply with all applicable statutes,
regulations or bylaws of any municipal, provincial or other governmental
authority, and the Lessee, after receipt of notice from the Lessor, does
not rectify such non-compliance with due diligence, then the Lessor's
designated contractors may, at the Lessor's option, rectify or repair said
deficiency which shall be at the Lessee's sole cost and expense, the same
to be paid as Additional Rent by the Lessee to the Lessor upon demand.
6.9 Lessor's Property/Fixtures
All alterations, additions, floor coverings, light fixtures and
improvements made to or installed upon or in the Demised Premises and the
Building (including, without limitation, the Leasehold Improvements) and
which in any manner are attached in, to, on or under the floors, walls or
ceilings shall immediately upon affixation be and become the property of
the Lessor without any payment by the Lessor to the Lessee, except that
the Lessee will have the right, but not the obligation, to remove:
(a) the emergency generator and the uninterrupted power supply backup
system installed by the Lessee, provided the Lessee repairs at its
cost all damage caused by such removal; and
(b) any trade fixtures which were approved by the Lessor and installed
upon or in the Demised Premises, by either the Lessor or the Lessee
(including, without limitation, all telephone systems and security
systems, but excluding card access related equipment, cameras
viewing common or exterior areas and related monitors, and the
wiring for same, paid for by the Lessor), in which event the Lessee
covenants and agrees to make good any damage or injury caused to the
Demised Premises resulting from such removal.
For further certainty, the Lessor acknowledges and agrees that
notwithstanding the Lessor's ownership interest in the Leasehold
Improvements as of the date they become affixed to the Demised Premises or
the Building, the Tenant will continue to have an insurable leasehold
interest in the Leasehold Improvements throughout the Term, the value of
such insurable interest being the cost incurred by the Lessee to install
the Leasehold Improvements, less any inducements, allowances and all other
contributions by the Lessor, direct or indirect, amortized on a straight
line basis commencing from the effective date of this Lease over the
course of the Term. The insurable leasehold interest of the Lessee in the
Leasehold Improvements will therefore decline over the course of the Term
and the insurable ownership interest of the Lessor in the Leasehold
Improvements will correspondingly increase over the course of the Term.
The
24
Lessee shall inform the Lessor in writing from time to time and at any
time upon request from Lessor of the costs incurred by the Lessee to
install the Leasehold Improvements.
6.10 No Liens
The Lessee shall not permit, do, or cause anything to be done to the Lands
and Building or the Demised Premises which would allow any lien, lis
pendens, judgment or certificate of any Court to be imposed or to remain
upon the Demised Premises, its contents, or the Lands and Building. In the
event of the registration of any such lien, the Lessee shall at its own
expense immediately cause the same to be discharged.
6.11 Destruction of Demised Premises
In the event that the Demised Premises or the Building or any part thereof
shall, at any time during the Term, be destroyed or damaged by fire,
lightning, tempest, explosion, act of God or the Queen's enemies, so as to
render the Demised Premises unfit for the purposes of the Lessee, then the
Rent hereby reserved, or a proportionate part thereof, according to the
nature and extent of the destruction or damage sustained, shall xxxxx,
such suspension in the case of destruction or damage to be until the
Demised Premises have been rebuilt (including Leasehold Improvements) and
made fit for the Lessee's repair or replacement of its trade fixtures and
chattels; provided that either the Lessor or the Lessee shall have the
option, in the event the Building or a substantial part thereof being
substantially destroyed or damaged such that the Building or any part
thereof cannot be repaired within one hundred eighty (180) days of the
commencement of repair and rebuilding as determined by the Lessor's
architect, acting reasonably, such determination to be made and
communicated to each of the Lessor and the Lessee within sixty (60) days
after such destruction or damage occurring, to terminate this Lease on
giving to the other party within thirty (30) days after receipt of such
architect's determination notice in writing of its intention to so
terminate this Lease, and thereupon Rent and any other payments for which
the Lessee is liable under this Lease shall be apportioned to a date being
sixty (60) days after such notice is given, and the Lessee shall on such
latter date immediately deliver up vacant possession of the Demised
Premises to the Lessor. If such option is not exercised, the Lessor shall
diligently rebuild the Demised Premises (including erecting and installing
the Leasehold Improvements) to the extent of its obligations as described
in this Lease (provided that the Lessor shall not be obligated to provide
any loans, allowances or inducements to the Lessee).
PART 7 - COMMON AREAS/SERVICES
7.1 Control of Common Areas and Facilities
The Lessor shall at all times have the right of control over the common
areas and common facilities of the Lands and Building and sidewalks
adjacent to the Lands. Such control includes control of security,
deliveries, contractors present in the Building, signs, traffic control,
access, the hours of operation and the use made by the Lessee and/or the
public of such common areas and common facilities.
7.2 Building Services
Subject to Force Majeure, the Lessor agrees, in addition to other common
area services, to provide the Lessee with access to common area lighting,
common area electrical service, elevator usage (including exclusive use of
the westerly elevator closest to Mainland Street and the shared use with
the Vancouver English Centre of the easterly elevator) parking and HVAC
seven (7)
25
days a week twenty-four (24) hours per day. As required, the Lessee may
install, at its sole cost, a card access security system for the doors
within the Building servicing solely the Demised Premises. Wherever
reasonably practical, electrical costs for the Demised Premises will be
metered by the Lessor, at the sole cost of the Lessor, and the full amount
of said costs, including Sales Taxes, charged directly to the Lessee as
Additional Rent based upon the BC Hydro Schedule 1220 for Commercial
Accounts (or comparable replacements thereof if said schedule is
discontinued or modified by BC Hydro or a successor provider of electrical
utilities). The Lessee agrees to pay its share of hydro used by or
benefiting the Lessee that is not directly metered, as estimated by the
Lessor acting reasonably, as an Operating Cost. The Lessee shall also
reimburse the Lessor, based upon the rates charged to the Lessor for said
utilities from time to time, for the Lessee's natural gas and excessive
water consumption, it being agreed that installation of an open loop water
based air-conditioning system by the Lessee shall constitute excessive
water consumption and a closed loop water based air-conditioning system
shall not constitute excessive water consumption provided such system is
operating properly. The Lessor also agrees that all utility invoices will
show how the invoice was calculated showing usage, time frame of usage and
related costs based upon the rates and charges described herein.
7.3 Building Alarm
The Lessee acknowledges that the Lessor currently alarms the Building with
perimeter protection and motion detector protection between approximately
11:45 p.m. and 7:00 a.m. daily. The Lessee agrees to use efforts in
preventing its employees and invitees from entering any common hallways in
the Building with motion detectors during these alarm activation hours,
and agrees to reimburse the Lessor for the Lessor's direct costs resulting
from alarms caused by the Lessee, the Lessee's employees and the Lessee's
invitees. The Lessor and the Lessee agree to work together to disengage
alarms in areas of the Building which will be frequented by the Lessee to
accommodate the Lessee's reasonable working requirements.
26
7.4 Parking
(a) Subject to the second paragraph of this Section 7.4, the Lessee
shall have the right to rent random or reserved (provided that
exterior wall reserved stalls are available, failing which requested
reserved stalls shall be random stalls) parking stalls in the
Building based upon its Proportionate Share of the parking stalls in
the Building throughout the Term and any renewals thereof, and to
have the Lessor or Lessor's agent at the Lessee's cost post signage
identifying any - reserved parking stalls which the Lessee has
rented. The rental rates for the parking stalls are subject to
adjustment by the Lessor to 80% of the market rates for Yaletown
random and reserved parking stalls from time to time. Further, the
Lessee shall have the exclusive right to, and shall rent during the
Term and any renewal thereof, the reserved parking on the second and
third floor adjacent to the Building and around the ramp leading to
the parking area and the current parking attendant booth as well as
the parking on the ramp, which parking area shall be included in the
foregoing parking ratio. The Lessee shall give the Lessor at least
one and one-half (1 1/2) months' notice from time to time indicating
the number of additional parking stalls it wishes to rent.
(b) It is agreed that the Lessee shall have the right to cancel any or
all of said parking stalls upon not less than one (1) calendar
months' written notice. Should the Lessee wish to reinstate the use
of any parking stalls, it shall provide the Lessor with three (3)
months' notice in writing.
(c) It is further agreed that in the event that the Lessor deems it
necessary to carry out maintenance work to the roof area of the
Building the Lessor shall have the right to temporarily suspend the
Lessee's parking privileges for affected parking stalls during the
period reasonably required for said work, it being understood that
the parking rates for such affected parking stalls shall xxxxx for a
corresponding period.
7.5 Storage and Emergency Generator Rooms
Notwithstanding anything in this Lease to the contrary, it is acknowledged
and agreed that the Lessor will not provide 1,000 to 1,400 square feet of
storage premises in the Building for the Term of this Lease and any
renewals thereof. However, the Lessor agrees that in lieu of providing
such storage space the Rent payable by the Lessee will be reduced to $8.00
gross per square foot per annum during the Term for 1,200 square feet of
Rentable Area of the Demised Premises, and at market rates for such deemed
storage space in the Building during any renewals of this Lease. The
Lessee shall not be obligated to use such space as storage space. The
emergency generator space shall be maintained in the location existing as
of the date of this Lease. Any disputes as to the market rate for such
spaces will be resolved in the manner set out in Section 15.4. The parties
agreed that the provisions of Sections 4.3, 4.4, 4.7 and 7.4, shall not
apply to the emergency generator space.
7.6 Refuse and Deliveries
The Lessee shall not place or leave or permit to be placed or left in or
upon any part of the Lands and Building any debris or refuse except as
allowed by the Lessor at specific times for refuse, deposit and pick-up in
areas indicated by the Lessor. In addition, all deliveries for the Lessee
shall be in such areas designated by the Lessor for that purpose. The
Lessor agrees that the Lessee shall have the right, at its option to be
exercised by written notice to the Lessor, to assume responsibility for
refuse collection from the Lessor.
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7.7 Directory Board
The Lessor shall not be obligated to maintain a directory board for the
Building.
7.8 Satellite and Communications
(a) Subject to the Lessee obtaining at its cost all required regulatory
and governmental approvals, the Lessor shall permit the Lessee to
place satellite transmission or receiving or other communication
equipment related to the conduct of its business on the roof of the
Building covering an aggregate area of not greater than 150 square
feet at any time during the Term of this Lease or any renewals
thereof, at the Lessee's cost. The Lessor shall not charge rent of
any kind or nature for such use by the Lessee, provided further that
the Lessor shall approve the location of such equipment prior to
installation of same, such approvals not to be unreasonably withheld
or delayed, and the Lessor, acting reasonably may relocate such
equipment from time to time at the Lessor's cost. Any direct
increase in Operating Costs for the Building attributable to
maintenance and use of this equipment will be paid for entirely by
the Lessee as Additional Rent.
(b) Notwithstanding the foregoing, it is agreed that said communication
equipment shall not be placed in any areas which limit or restrict
parking or vehicular movement on the roof of the Building. In the
event that the Lessor elects to perform repair or maintenance work
in a roof area covered or impacted by said communication equipment,
the Lessee agrees, upon not less than fourteen (14) days' written
notice, to temporarily relocate said equipment at its cost.
(c) The Lessee shall have twenty-four (24) hour access to
telecommunications centres within the Building other than those
rented to other parties on an exclusive basis, it being understood
that during periods when the Building is alarmed the Lessee shall
employ, at the Lessee's cost, the Lessor's alarm response company to
access the telecommunication centres. The Lessor will facilitate the
Lessee getting additional telecommunications carriers into the
Building. The Lessee shall be permitted to route communications
cabling and such wiring and ducting as may be required for its
emergency generator and communications equipment throughout the
common areas of the Building between their various spaces or through
premises leased by other tenants (to the extent required, the Lessee
acting reasonably, and to the extent the Lessor can accommodate,
acting reasonably), provided that the Lessee does so with as little
disruption to other Building occupants as reasonably possible and is
liable for any damage to the Building or any portion thereof as a
result of said cabling.
7.9 Bicycle Storage
The Lessor agrees to provide to the Lessee, free of charge, an area for
bicycle storage in the loading dock area, mutually acceptable to both
parties, during the Term of this Lease and any renewal thereof. At the
Lessor's cost, the Lessor will relocate the Lessee's existing bike racks
from the generator room, provide additional bike racks if required,
construct a stud and drywall enclosure (subject to City approval), and
install card access permitting access to only authorized personnel of the
Lessee provided that the Lessor shall not have any liability for any theft
or damage to any bikes in the bicycle storage area unless such theft or
damage results from the negligence or wrongful act of the Lessor or those
for whom, in law, the Lessor is responsible. It is agreed that the
provisions of Sections 4.3, 4.4, 4.7 and 7.4 shall not apply to said
bicycle storage area. Notwithstanding the foregoing, it is agreed that
said bicycle storage area may be
28
relocated by the Lessor, at its cost, from time to time throughout the
Term and any renewal thereof to an alternative area within, on top of, or
adjacent to the Building.
7.10 Floor Loading
The Lessor hereby represents and warrants that the floor loading capacity
of the first floor of the Building is at least 100 lbs. per square foot,
live load, and the floor loading capacity of the second floor of the
Building is at least 150 lbs. per square foot, live load, and the floor
loading capacity of the third floor of the Building is at least 50 lbs.
per square foot, live load.
PART 8 - ASSIGNMENT AND SUBLETTING
8.1 Assignment
The Lessee agrees not to assign this Lease or any interest herein, or
sublet, license, transfer or part with possession of the Demised Premises
or any part thereof (collectively called an "Assignment") without first
obtaining the prior express consent in writing of the Lessor, which
consent shall not be unreasonably withheld or delayed, provided in all
cases the Lessee and the Indemnifier remain bound by the terms, conditions
and covenants of this Lease. In requesting the Lessor's consent, the
Lessee shall give the Lessor no less than ten (10) business days' written
notice of the terms of any contemplated Assignment, which notice shall
specify the name and address of the proposed sublessee, assignee or
licensee with such financial statements, credit, character and other
references and information (including the type of business proposed to be
conducted and carried out on the Demised Premises) as the Lessor may
reasonably require. In the event that the Lessor should consent to any
such Assignment, the Lessor shall nevertheless, and does hereby reserve
its right to approve any further Assignment, and may require, as a
condition of the Lessor giving its consent to an assignment (but not to a
sublease), that the assignee, sublessee, licensee or person taking
possession covenant directly with the Lessor to observe and perform the
Lessee's obligations contained in this Lease. The acceptance of Rent from
or the performance of any obligation hereunder by a person other than the
Lessee shall not be construed, in the absence of the prior express consent
in writing of the Lessor, as an admission by the Lessor that such person
has any right to or interest in the Demised Premises. Except with the
express written consent of the Lessor, no permitted Assignment shall
release the Lessee or the Indemnifier of their obligations hereunder. The
Lessee shall pay to the Lessor as Additional Rent the reasonable costs and
fees of the Lessor associated with any request for a consent to an
Assignment.
8.2 Reorganization, Change in Ownership or Use by Affiliate
The Lessor agrees that a reorganization, merger, sale, partnership change
or other change in ownership interest of the Lessee shall not be deemed to
be an Assignment within the meaning of Section 8.1, for which the Lessee
must obtain the prior consent in writing of the Lessor. It is further
agreed that the use by, assignment to, or the subleasing to any
subsidiary, affiliate, parent company which owns or controls the Lessee,
or successor of the Lessee shall not be deemed an Assignment under Section
8.1, provided the Lessee and the Indemnifier remain bound by the terms,
conditions and covenants of this Lease.
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PART 9 -- INSURANCE
9.1 Lessee to Insure
The Lessee will take out and keep in force during the Term of this Lease
all perils replacement cost insurance for the Lessee's trade fixtures,
furniture and equipment, commercial general liability (including bodily
injury, death and property damage) and tenant's legal liability insurance
all in amounts and with policies and forms satisfactory from time to time
to the Lessor (but in any event not less than $5,000,000.00 inclusive
limits) each with insurers and upon terms acceptable to the Lessor. Each
such policy shall name the Lessor as an additional insured as its interest
may appear and shall provide that the insurer shall not have any right of
subrogation against the Lessor on account of any loss or damage covered by
such insurance or on account of payments made to discharge claims against
or liabilities of the Lessor, by such insurance. The cost of premium for
each and every such insurance policy shall be paid by the Lessee. The
Lessee shall obtain from the insurers under such policies undertakings to
notify the Lessor in writing at least thirty (30) days prior to any
cancellation thereof or any material change therein. The Lessee agrees at
the request of the Lessor to forthwith provide the Lessor with written
evidence of the existence of the insurance policies described herein. The
Lessee shall not do or omit or permit to be done or omitted upon the
Demised Premises anything which shall cause the rate of insurance upon the
Building to be increased and the Lessee shall comply with any and all
requirements pertaining to the Demised Premises of any insurance
organization or company necessary for the maintenance of reasonable fire
and other insurance covering the Demised Premises or the Building.
9.2 Lessor to Insure
(a) The Lessor shall throughout the Term carry:
(i) insurance on the Building (excluding the foundations and
excavations) and the Leasehold Improvements (including,
without limitation, the HVAC system for the Demised Premises)
machinery, boilers and equipment in or servicing the Building
and owned by the Lessor or the owners of the Building
(excluding any property which the Lessee is obliged to insure
under Section 9.1) against damage by fire and extended perils
coverage;
(ii) public liability and property damage insurance with respect to
the Lessor's operations in the Building; and
(iii) such other form or forms of insurance as the Lessor reasonably
considers advisable. Such insurance shall be in such
reasonable amounts and with such reasonable deductibles as
would be carried by a prudent owner of a reasonably similar
building, having regard to size, age and location.
Notwithstanding any other provision of this Lease, the
Lessor's insurance shall contain a waiver of subrogation by
the insurers against the Lessee and its subtenants to the
extent such waiver is commercially available.
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(b) The Lessor's insurance shall name the Lessee as an additional
insured, as to its interest, and in the event that the Building and
the Leasehold Improvements are destroyed or damaged to such an
extent that the Lessor elects not to rebuild the Building and the
Leasehold Improvements, then the Lessor and the Lessee shall share
the proceeds of insurance as their respective interests may appear
herein.
PART 10 - EXCLUSION OF LIABILITY AND INDEMNITY
10.1 Lessee's Indemnity
The Lessee shall indemnify and save harmless the Lessor from and against
any and all claims of any kind whatsoever arising out of the Lessee's use
of or presence in the Demised Premises, including without limiting the
generality of the foregoing, all claims for personal injury, sickness or
death or property damage suffered by the Lessor or by any other tenant of
the Lands and Building arising out of the use of or presence in the
Demised Premises or the Building or arising out of the conduct of any work
or through any act or omission of the Lessee or any assignee, subtenant,
agent, contractor, servant, employee, invitee or licensee of the Lessee or
by reason of any breach of a term of this Lease by the Lessee and, against
and from all costs, counsel fees, expenses and liabilities incurred in or
resulting from any claim, action or proceeding brought thereon, unless
such claim is caused by the Lessor or those for whom the Lessor is, at
law, responsible. This indemnity shall survive the expiration of this
Lease.
10.2 Lessor's Indemnity
Notwithstanding any other provision of this Lease, the Lessor shall
indemnify the Lessee and save it harmless from all direct loss (excluding
economic or consequential loss), claims, actions, damages, liability and
expense in connection with loss of life, personal injury, damage to
property or any other loss or injury whatsoever arising out of the
negligence of the Lessor, or any breach of the Lessor's obligations under
this Lease, or occasioned wholly or in part by any negligent act or
omission of the Lessor or any one for whom the Lessor is responsible at
law, except where expressly authorized by any other provision of this
lease. If the Lessee shall, without fault on its part, be made a party to
any litigation commenced by or against the Lessor, then the Lessor shall
protect, indemnify and hold the Lessee harmless in connection with such
litigation.
10.3 Exclusion of Liability
The Lessor, its agents, servants and employees, shall not be liable nor
responsible in any way for any damage or injury to any property of the
Lessee which is entrusted to the care and control of the Lessor, its
agents, servants or employees nor for any personal or consequential injury
of any nature whatsoever that may be suffered or sustained by the Lessee
or any employee, agent, customer, invitee or licensee of the Lessee or any
other person who may be upon the Lands and Building or the Demised
Premises or for any loss of or damage or injury to any property belonging
to the Lessee or to its employees or to any other persons while such
property is on the Lands and Building or the Demised Premises and, in
particular but without limiting the generality of the foregoing, the
Lessor shall not be liable for any damage or damages of any nature
whatsoever to any such property caused by the failure by reason of a
breakdown or other cause, to supply adequate drainage, heating, air
conditioning, ventilation, snow or ice removal, or by reason of the
interruption of any public utility or service or in the event of steam,
water, rain or snow which may leak into, issue, or flow from any part of
the building or from the water, steam, sprinkler, or drainage pipes or
plumbing works of the same, or from any other place or quarter or for any
damage caused by anything done or omitted by any tenant of the Building,
unless such claim is directly caused by the Lessor or those for whom the
Lessor is, at law, responsible. The
31
Lessee shall not be entitled to any abatement of rent in respect of any
such condition, failure or interruption of service; and the Lessor, its
agents, servants, employees or contractors, shall not be liable for any
damage suffered to the Demised Premises or the contents thereof by reason
of the Lessor, its agents, employees or contractors, entering upon the
Demised Premises to undertake the examination thereof or any work therein
in the case of any emergency.
PART 11 -- LESSOR'S RIGHTS AND REMEDIES
11.1 Default
If and whenever the Rent (including Additional Rent) hereby reserved or
any part thereof shall not be paid on the day appointed for the payment
thereof and the Lessee fails to remedy such breach within three (3)
business days of notice thereof by the Lessor, or in case of breach or
non-observance or non-performance by the Lessee of any of the covenants,
agreements, provisos, conditions or rules and regulations on the part of
the Lessee to be kept, observed or performed and the Lessee fails to
remedy such breach within fifteen (15) days of notice thereof by the
Lessor (or immediately in the case of an emergency or such shorter period
as required by any lawful governmental authority) or, if such breach
cannot reasonably be remedied within fifteen (15) days, the Lessee fails
to commence to remedy such breach within such fifteen (15) day period or
thereafter fails to proceed diligently to remedy such breach, or if
without the written consent of the Lessor, the Demised Premises shall be
used by any person other than the Lessee, the Lessee's permitted assigns
or permitted sub-lessees, or for any purpose other than that for which the
Demised Premises were leased, or in case the Term shall be taken in
execution or attachment for any cause whatever, then and in every such
case it shall be lawful for the Lessor thereafter to immediately and
without notice enter into and upon the Demised Premises or any part
thereof in the name of the whole and the same to have again, repossess and
enjoy as of its former estate, notwithstanding anything to the contrary
herein.
11.2 Termination of Lease
If the Term hereof shall be at any time seized in execution or attachment
by any creditor of the Lessee or if a receiver or receiver-manager is
appointed in respect of any property of the Lessee or the Lessee shall
make any assignment for the benefit of creditors or shall make any bulk
sale or become bankrupt or insolvent or take the benefit of any statute
now or hereafter in force for bankrupt or insolvent debtors, or, if the
Lessee is a corporation and any order shall be made for the winding-up of
the Lessee, or other termination of the corporate existence of the Lessee,
then in any such case this Lease shall, at the option of the Lessor, cease
and determine and the Term shall immediately become forfeited and void and
the then current month's Rent and the next ensuing three (3) months' Rent
(including Additional Rent) shall immediately become due and be paid and
the Lessor may immediately claim the same together with any arrears then
unpaid and any other amounts owing to the Lessor by the Lessee and the
Lessor may without notice or any form of legal process forthwith re-enter
upon and take possession of the Demised Premises and become the owner of
the Lessee's effects (save and except for any software which shall remain
owned by the Lessee in any event) and remove the Lessee's effects
therefrom, any statute or law to the contrary notwithstanding, the whole
without prejudice to, all other rights, remedies and recourses of the
Lessor.
11.3 Payment of Lessor's Expenses
If at any time an action is brought for recovery of possession of the
Demised Premises, or the recovery of Rent or any part thereof, or because
of a breach by act or omission of any covenant
32
contained herein on the part of the Lessee, and a breach is established,
the Lessee shall pay to the Lessor all expenses incurred by the Lessor in
the enforcement of its rights and remedies hereunder including reasonable
legal expenses on a solicitor and own client basis.
11.4 Right of Lessor to Perform Lessee's Covenants
If at any time, and so often as the same shall happen, the Lessee shall
make default in the observance or performance of any covenant contained
herein on its part to be observed or performed and has not cured such
default following written notice thereof pursuant to Section 11.1 hereof,
then the Lessor may, but shall not be obligated so to do, without waiving
or releasing the Lessee from its obligations under this Lease, itself
observe and perform the covenant or covenants in respect of which the
Lessee has made default or make payment of the monies the Lessee has
failed to pay; and all costs and expenses incurred by the Lessor in the
observance or performance of such covenant or covenants including without
limitation reasonable legal costs as between solicitor and own client and
any moneys so paid by the Lessor will, with interest thereon from the date
of the incurring of such costs or expenses or payments of monies, at a
rate equal to 3% per annum above the prevailing prime commercial lending
rate then being published by any Canadian chartered bank designated by the
Lessor, shall be a charge on the Demised Premises in favour of the Lessor
in priority to the interest of the Lessee hereunder and of any person
claiming through or under the Lessee, and all such costs, expenses and
monies and interest thereon shall be payable by the Lessee to the Lessor
forthwith on demand as Additional Rent. The Lessor shall have the same
rights and remedies and may take the same steps for recovery thereof as
for the recovery of Rent in arrears.
11.5 Re-entry
On the Lessor becoming entitled to re-enter upon the Demised Premises
under any of the provisions of this Lease, the Lessor, in addition to all
other rights, shall have the right to immediately determine forthwith this
Lease and the Term by leaving upon the Demised Premises notice in writing
of its intention so to do, and thereupon Rent shall be computed,
apportioned and paid in full to the date of such determination of this
Lease and any other payments for which the Lessee is liable hereunder
shall be paid and the Lessee shall immediately deliver up vacant
possession of the Demised Premises to the Lessor, and the Lessor may
re-enter and take possession thereof.
11.6 Right of Lessor to Seize
If the Lessor is entitled to do so at law, the Lessor may seize and sell
all the Lessee's goods and property which at any time have been located
within the Demised Premises whether or not the same are at the time of
seizure located within the Demised Premises or have been removed to
another location, and apply the proceeds of such sale against Rent
outstanding and upon the costs of the seizure and sale as provided for at
law. The Lessee further agrees that if it leaves any Rent unpaid, the
Lessor, in addition to any remedy otherwise provided at law or in equity,
may seize and sell such goods and property of the Lessee at any place to
which the Lessee or any other person may have removed them, in the same
manner as if such goods and property had remained upon the Demised
Premises.
11.7 Remedies for Non-payment
In the event of default by the Lessee in payment of Additional Rent or any
other amount payable by the Lessee hereunder, the Lessor shall have, in
addition to any other right or remedy that the
33
Lessor would otherwise have at law or in equity, the same rights and
remedies that the Lessor would have in the case of default in payment of
Rent.
11.8 Non-waiver
No condoning, excusing or overlooking by the Lessor of any default, breach
or non-observance by the Lessee at any time or times in respect of any
covenant, proviso or condition contained herein shall operate as a waiver
of or defeat or affect the Lessor's rights hereunder in respect of any
continuing or subsequent default, breach or non-observance. No waiver
shall be implied by anything done or omitted by the Lessor unless the
Lessor gives an express written waiver to that effect.
11.9 Remedies Cumulative
All rights and remedies of the Lessor in this Lease contained shall be
cumulative and not alternative.
11.10 Interest
The Lessee shall pay to the Lessor interest at a rate equal to 3% per
annum above the prevailing prime commercial lending rate published from
time to time by any Canadian chartered bank designated by the Lessor, on
all payments of Rent, Additional Rent and all other sums required to be
paid under this Lease which have become overdue so long as such monies
remain unpaid.
PART 12 -- MORTGAGES AND ASSIGNMENTS BY LESSOR
12.1 Subordination
This Lease is subject and subordinate to all mortgages including any deed
of trust and mortgage securing bonds, and all indentures supplemental
thereto which may now or hereafter affect such leases and the Lands and
Building, and to all renewals, modifications, consolidations, replacements
and extensions thereof. The Lessee agrees to execute promptly any
certification and confirmation of such subordination as the Lessor may
request. It is agreed by and between the parties hereto that
notwithstanding any subordination of this Lease to mortgages as provided,
the Lessee's obligations under the Lease shall remain in full force and
effect notwithstanding any action at any time taken by a mortgagee to
enforce the security of any mortgage, provided however that any such
postponement or subordination shall reserve to the Lessee the right to
continue in possession of the Demised Premises under the terms of this
Lease so long as the Lessee shall not be in default hereunder.
Notwithstanding the foregoing, the Lessee will not be required to attorn
to a purchaser, mortgagee or trustee unless such third party enters into a
non-disturbance agreement with the Lessee in a form satisfactory to the
Lessee, acting reasonably.
12.2 Status Statement
For the purpose of confirming the status of this Lease to any person,
including a purchaser or proposed purchaser or mortgagee or proposed
mortgagee of the Lands and Building, the Lessee shall from time to time
and within seven (7) days of written request, execute and deliver to the
Lessor a statement in writing certifying that this Lease is unmodified or,
if modified, stating the modifications, that it is in full force and
effect, the amount of the annual rent paid hereunder, the dates to which
such rent and other charges hereunder have been paid, and whether there is
any existing default on the part of the Lessor of which the Lessee has
notice. The Lessee agrees that
34
the statement so delivered shall be binding and may be relied upon by the
person to whom it is directed.
12.3 Non-disturbance Agreement
The Lessor agrees that concurrently with the execution of this Lease, it
will provide the Lessee with non-disturbance agreements acceptable to the
Lessee and the Lessor, both acting reasonably, from any mortgage holders
or lien holders having priority to this Lease.
12.4 Registration
The Lessee may at its option and at the cost and expense of the Lessee,
cause this Lease or a Short Form Lease to be registered in the Vancouver
Land Title Office. All expenses with respect to the said registration,
including all governmental registration fees and if required, the costs of
surveying the Demised Premises, or the Lands and Building and all other
costs incidental to preparing a plan and documents in registrable form,
shall be entirely borne by the Lessee.
PART 13 -- OVERHOLDING BY LESSEE
13.1 Month to Month Tenancy
(a) The Lessor shall grant to the Lessee the automatic provision to hold
over the Demised Premises for up to six (6) months at the end of the
Term at a monthly rent of 115% of the monthly Basic Rent payable
during the last month of the Term plus the Lessee's Proportionate
Share of Operating Costs and Additional Rent payable hereunder,
provided the Lessee has notified the Lessor of its intention to
waive its Option to Renew in Part 17 and notifies the Lessor in
writing (the "Notice") of the date (the "Termination Date") the
Lessee shall vacate the Demised Premises, it being understood and
agreed that such Notice shall be delivered no later than nine (9)
months prior to expiry of this Lease otherwise this Section 13.1
shall be deemed waived.
(b) The tenancy created thereby shall be a month to month tenancy which
will terminate on the Termination Date (and not earlier, except in
the event of a default pursuant to Section 11.1 of this Lease), and
shall not be deemed to be a tacit renewal of this Lease, and
otherwise on the terms and conditions herein set out, save and
except for any rights pursuant to Parts 16 or 17 hereof granted to
the Lessee herein.
PART 14 - LESSOR'S COVENANTS
14.1 Lessor's Covenants
The Lessor covenants with the Lessee, so long as the Lessee is not in
breach of any of its covenants hereunder, as follows:
(a) Quiet Enjoyment. To permit, subject as herein provided, the Lessee
to peaceably possess and enjoy the Demised Premises for the Term and
any renewals without any disturbance or interruption by the Lessor
or by its successors and assigns, or by any person claiming by,
through or under the Lessor;
(b) Utilities. To make available to the Demised Premises electricity and
power requirements pursuant to sections 4.7(a) and 4.7B(a) to this
Lease, and, in normal quantities gas, water,
35
and other public utilities generally made available to other tenants
of the Building by the Lessor, unless otherwise provided for in the
Lease, save and except that the Lessor shall not be obligated to
provide heating and air conditioning of the Demised Premises,
provided that the Lessor shall have no liability for failure to
supply utilities when prevented from doing so by repairs, or causes
beyond the Lessor's reasonable control;
(c) Repair and Maintenance. To repair or maintain and to keep in good
repair as would a prudent owner the foundations, outer walls, roof,
spouts and gutters of the Building and all of the common areas
therein, parking areas, and the plumbing, sewage and electrical
systems therein except to the extent that they are located on the
Demised Premises or in any other portions of the Lands and the
Building occupied by other tenants; provided that the Lessor shall
use reasonable efforts in exercising its rights under this clause so
as to minimize any interference with the Lessee's business and use
of the Demised Premises, the Lessee shall not have any right to
object to nor any right to any claim of damages or any reduction or
abatement of Rent in respect of the exercise of the Lessor's rights
under this clause. The Lessee shall permit the Lessor, its servants
or agents upon forty-eight (48) hours' prior written notice (or
without notice in the case of an emergency) to enter the Demised
Premises from time to time for the purpose of inspecting and making
repairs, alterations or improvements to the Building, and the Lessee
shall not be entitled to compensation for any inconvenience,
nuisance or discomfort occasioned thereby, provided the Lessor takes
all practical measures to minimize any interference with the
Lessee's business;
(d) Use of Common Areas. To permit the Lessee and its employees and all
persons lawfully requiring communication with them to have the use
in common with others of the entrance from the parking area and the
stairways, corridors and easterly elevator in the Building
(excepting those common areas for which the Lessee is entitled to
exclusive access as set out in this Lease), subject to such
reasonable rules and regulations as the Lessor may make in regard
thereto from time to time, provided that the Lessor shall in no way
be responsible or obligated for failure to enforce any rules and
regulations in this regard. The Lessor agrees that the Lessee shall
be entitled to exclusive access to the Main Entry, the westerly
elevator closest to Mainland Street and the loading bays, except as
otherwise provided in this Lease. The Lessee agrees that the costs
of repairs and maintenance for the westerly elevator (other than the
refinishing work described in section 4.7B(m) will be for the
account solely of the Lessee, and will not be included in Operating
Costs. When a card access security system is installed upon the
Building by the Lessor the Lessee shall abide by any rules and
regulations regarding the use of said system made by the Lessor and
shall pay upon demand any costs or charges incurred by the improper
use of the said system by the Lessee, its servants or agents;
(e) Lessor to Act Reasonably. The Lessor shall act reasonably and
expeditiously to minimize the extent and duration of any stoppage,
interruption or reduction of the services, systems and utilities
servicing the Demised Premises. The Lessor shall give the Lessee
reasonable advance notice of any planned stoppage, interruption or
reduction, shall advise the Lessee prior to scheduling such work to
enable the Lessee to schedule its business to minimize disruption,
and shall to the extent commercially reasonable consider the
Lessee's reasonable scheduling suggestions.
14.2 Environment Warranty - Lessor
The Lessor represents and warrants that to its knowledge the Lands and the
Building comply in all material respects with all applicable federal,
provincial or local environmental, health and
36
safety statutes and regulation, that there are no Hazardous Substances in
the Building or in or about the Lands with the exception of underground
oil tanks and of trace amounts of asbestos which potentially may remain
within inaccessible areas, but to the Lessor's knowledge such areas meet
or exceed acceptable levels for commercial buildings as determined by
applicable governmental authorities (including, without limitation,
regulations under the Workers Compensation Act (British Columbia)). The
Lessor further represents and warrants that it will be responsible for the
cost of removing any asbestos which is exposed on any floor of the
Building during demolition, that it will repair any damage done to the
Building as a result of such removal and that neither the Lands nor the
Building are subject to any outstanding orders or directives pursuant to
any judicial orders or safety statutes or regulations. Any future testing
of any Hazardous Substances or potentially Hazardous Substances not caused
by the Lessee or those for whom the Lessee is responsible at law shall be
at the sole cost and expense of the Lessor, and if it is determined by the
Lessor, or any regulatory body, that removal is necessary, the removal and
disposal of the said substances shall be at the sole cost and expense of
the Lessor. The Lessor agrees to indemnify the Lessee and its directors,
officers, employees, agents, successors and assigns from any and all
liabilities, actions, damages, claims, remediation cost recovery claims,
losses, costs, orders, fines, penalties and expenses whatsoever (including
all legal and consultants' expenses and the cost of remediation of the
Building and any adjacent property) arising from or in connection with:
(a) any breach of or non-compliance with the provisions of this Section
by the Lessor; or
(b) the existence of, or the release into the environment of, any
Hazardous Substances in the Building or in or about the Lands caused
by the underground oil tanks or by the Lessor or those for whom the
Lessor is responsible for at law.
The obligations of the Lessor under this Section shall not survive the
expiry or earlier termination of this Lease.
PART 15 -- GENERAL CONDITIONS
15.1 Rules and Regulations
The Lessor reserves the right to make such Rules and Regulations as in its
judgment, acting reasonably, may from time to time be necessary and or
desirable for the proper operation, safety, security, parking,
environment, care, access and cleanliness of the Building and for the
preservation of order and the Lessee agrees that it will abide thereby and
that its employees, agents, servants and any others permitted by the
Lessee to occupy or enter the Demised Premises will, at all times, abide
by such rules and regulations of which it has notice, and that a default
in the performance and observation thereof shall have the same effect as a
default under any of the covenants or conditions of this Lease. The Rules
and Regulations attached as Schedule "B" hereto shall be applicable until
amended by the Lessor.
15.2 Notice
Any notice, demand, request, consent or objection required or contemplated
to be given or made by any provision of this Lease shall be given or made
in writing and either delivered personally or sent by facsimile
(604-687-6340) or by registered mail, postage prepaid, addressed:
37
(a) to the Lessor at:
520 -- 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
and to:
990 -- 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
and to:
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
(b) or to the Lessee at:
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Director of Facilities
(c) with a copy to the Lessee, at:
x/x 000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX
X.X.X
00000
Attention: Corporate Real Estate Manager (Mail Stop S1/03/M8)
or to such other address which either party may from time to time notify
the other in writing. The time of giving or making such notice, demand,
request, consent or objection shall be, if delivered or sent by facsimile,
when delivered or transmitted, and if mailed, then on the 4th business day
after the day of mailing thereof. In the event of a mail strike, mail
slowdown or other labour dispute which might affect delivery of such
notice, then all such notices and demands shall be delivered or
transmitted by facsimile. If in this Lease two or more persons are named
as Lessee such notice, demand, request, consent or objection shall be
sufficiently given or made if and when the same shall be given to any one
of such persons.
15.3 Showing of Premises
The Lessee shall permit the Lessor or its agents or employees to show the
Demised Premises to prospective investors, purchasers, agents, brokers and
lenders at any time during the Term during normal business hours upon not
less than twenty-four (24) hours' prior written notice to the Lessee, and
to prospective tenants during the last nine (9) months of the Term (if the
Term has not been renewed by the Lessee) during normal business hours upon
twenty-four (24) hours' prior written notice to the Lessee, provided in
each such case the Lessor is accompanied by the representative of the
Lessee, the group consists of no more than three (3) persons and no
pictures
38
are taken within the Demised Premises and the Lessor shall act reasonably
and shall not unduly disrupt the Lessee's use and quiet enjoyment of the
Demised Premises.
15.4 Dispute Resolution
In the event the Lessor and the Lessee are unable to agree as to any
matters set out in this Lease which require agreement (save and except the
rent to be determined pursuant to Section 17.1), then either party may
notify the other, by written notice (in this Section, the "Notice"), of a
desire to resolve the dispute by mediation and a meeting will be held
promptly between the parties, attended by individuals with decision-making
authority regarding the dispute, to attempt in good faith to negotiate a
resolution of the dispute. If, within fourteen (14) days after such
meeting or such further period as is agreeable to the parties (the
"Negotiation Period"), the parties have not succeeded in negotiating a
resolution of the dispute, they agree to submit the dispute to mediation.
The parties will jointly appoint a mutually acceptable mediator, seeking
assistance from the British Columbia International Commercial Arbitration
Centre if they have been unable to agree upon such appointment within
twenty (20) days following the conclusion of the Negotiation Period. If
the parties are not successful in resolving the dispute through mediation,
or if the mediation has not commenced within thirty (30) days following
the Negotiation Period, then the parties agree that the dispute will be
settled by arbitration pursuant to the Commercial Arbitration Act of
British Columbia, as amended from time to time, or any like statute in
effect from time to time and the decision of such arbitrator(s) shall be
final and binding upon the parties.
PART 16 - RIGHT OF FIRST OFFER
16.1 Right of First Offer
Provided that the Lessee is not in breach of this Lease, the Lessor will
grant to the Lessee the right of first offer during the Term and any
renewal thereof to lease the Remainder First Floor Premises on an "as is
where is" basis without any loan, inducement, allowance or Lessor's
Repairs/Work, on the terms and conditions provided herein and otherwise on
the terms and conditions of this Lease, mutatis mutandis, as follows:
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(a) not more than nine (9) months or less than two (2) months before the
date the Lessor expects the Remainder First Floor Premises, or any
part thereof, to become available (i.e. the date the term of the
existing lease will expire or terminate if the existing tenant does
not have a contractual right of renewal), the Lessor shall deliver
to the Lessee notice in writing identifying what part of the
Remainder First Floor Premises is available and the date upon which
it will be available;
(b) the Lessee shall have twenty (20) business days from the date of
receipt of such notice within which to advise the Lessor, in
writing, that it exercises its option to lease the part of the
Remainder First Floor Premises set out in the notice;
(c) the Basic Rent per square foot of the Remainder First Floor Premises
shall be equal to the Basic Rent per square foot of the Original
Premises payable by the Lessee under this Lease from time to time;
(d) the term of the lease of any such part of the Remainder First Floor
Premises shall commence on the date thirty (30) days following the
date upon which the space becomes vacant (as specified in the
notice) and shall terminate on the expiry of the Term of this Lease
or any renewal thereof;
(e) if the Lessee fails to exercise its option with respect to any part
of the Remainder First Floor Premises, this option with respect to
such part only shall become null and void and have no further effect
but shall continue to apply if such part again becomes available to
lease and with respect to any other part of the Remainder First
Floor Premises;
(f) any inducements or allowances provided for in this Lease shall not
apply to or benefit any premises leased under this option; and
(g) if the whole of the Remainder First Floor Premises becomes
available, the Lessee may only exercise this right of first offer
with respect to the whole of the Remainder First Floor Premises.
PART 17 - OPTION TO RENEW
17.1 Grant of Option
Provided the Lessee is not in breach of this Lease, the Lessee shall have
the right to renew this Lease with respect to either:
(a) the whole of the Demised Premises and any additional space leased
pursuant to Section 16.1; or
(b) subject to Section 17.4, only that part of the Demised Premises
located on the first floor of the Building together with the
exclusive use of the First Floor Patio,
at the option of the Lessee, for one additional term of five (5) years on
the same terms and conditions, save only for the Basic Rent, Lessor's
Repairs/Work, the Loan, or any Lessee inducements or Lessee allowances.
For greater certainty, the Lessee may exercise this renewal option for
either the whole or a part of the Demised Premises as set out above.
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17.2 Basic Rent
If the Lessee exercises this option to renew with respect to the whole of
the Demised Premises, the Basic Rent during the renewal period shall be
the then fair market rent of comparable "Office Premises" (as defined in
Section 17.5) inclusive of such tenant inducements as free Basic Rent,
tenant improvement allowances and other incentives, if any, offered by
landlords of such Office Premises at the time agreed between the parties,
and failing such agreement within four (4) months of the date of the
exercise of the option, as determined by arbitration pursuant to the
Commercial Arbitration Act of British Columbia. If the Lessee exercises
this option to renew with respect only to the first floor of the Building,
then the Basic Rent during the renewal term will be the fair market rent
as established above, provided that in no event will the Basic Rent be
less than the Basic Rent payable during the immediately preceding year of
the Term, nor will it be more than $18.00 per square foot of Rentable
Area.
17.3 Exercise of Option
To exercise this Option to Renew, the Lessee shall give written notice to
the Lessor as follows:
(a) if the Vancouver English Centre (or its successors or assigns) does
not exercise its option to renew that portion of the first floor of
the Building which it is currently leasing (the "Remainder First
Floor Premises"), then the Lessor will on or before July 30, 2011
provide written notice (the "Renewal Notice") to the Lessee that the
Vancouver English Centre has not exercised its option to renew its
lease with respect to the Remainder First Floor Premises, and in
such event if the Lessee proposes to exercise its option to renew
only that part of the Demised Premises located on the first floor of
the Building, then the Lessee shall give written notice to the
Lessor that it exercises such option to renew within thirty (30)
days of receiving the Renewal Notice from the Lessor; and
(b) if the Lessor does not provide the Lessee with a Renewal Notice
within the time limited above, or the Lessee intends to exercise its
option to renew with respect to the whole of the Demised Premises,
then no later than twelve (12) months prior to the expiry of the
Term the Lessee shall give written notice to the Lessor that it
exercises such option to renew;
otherwise this Option to Renew shall be deemed waived.
17.4 Remainder First Floor Premises
The Lessee agrees that in the event it exercises its option to renew only
that part of the Demised Premises located on the first floor of the
Building, then, in the event that the Lessor has provided the Lessee with
the Renewal Notice within the time limited, then the Lessee will lease
from the Lessor the Remainder First Floor Premises for the balance of the
existing Term and the renewal term at the fair market rent for such
premises as established in Section 17.2 above. The Lessor agrees to
provide the Remainder First Floor Premises to the Lessee in an "as is
condition" on the date following the end of the term of the lease to the
Vancouver English Centre. The Rent payable by the Lessee with respect to
the Remainder First Floor Premises will not commence until the date which
is 105 days following the date possession is provided to the Lessee to
enable the Lessee to fixture the Remainder First Floor Premises.
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17.5 Office Premises
For the purposes of Section 17.2, "Office Premises" means office premises
with base building systems including, without limitation, HVAC, electrical
systems, lighting and plumbing, all at a standard consistent with the
systems then supplying the Demised Premises, but without Lessee finishings
including, without limitation, all floor coverings, ceiling treatments if
installed at the cost of the Lessee, wall coverings, interior walls and
all built-in improvements including any raised flooring, cupboards,
shelving, lockers, sinks, appliances and showers.
17.6 Amendments to the Lease
The Lessee acknowledges that certain of its rights set out in this Lease
were granted by the Lessor in consideration for the Lessee leasing the
whole of the Demised Premises. Accordingly, notwithstanding the terms and
conditions of Section 17.1, the Lessee agrees that in the event it
exercises its option to renew only that part of the Demised Premises
located on the first floor of the Building, then its rights under Part 19
and its rights relating to exclusivity (with the exception of the First
Floor Patio) will be surrendered including, without limitation, signage
rights, naming rights, exclusive use of the Main Entry, exclusive use of
the westerly elevator, exclusive use of the Second Floor Patio, and
exclusive use of certain building loading bays. In the event the Lessor
and the Lessee are unable to agree, each acting reasonably, as to whether
additional rights are to be affected and the manner in which they are to
be affected, then such dispute will be settled in the manner set out in
Section 15.4 of this Lease.
PART 18 -- INDEMNITY
18.1 Indemnity
In consideration of the Lessor leasing the Demised Premises to the Lessee
and the sum of $1.00 now paid by the Lessor to the Indemnifier and other
good and valuable consideration (the receipt and sufficiency of which is
hereby acknowledged by the Indemnifier), the Indemnifier unconditionally
agrees to and covenants with the Lessor to indemnify and save harmless the
Lessor from any loss, cost or damage, including consequential loss and
costs on a solicitor and own client basis, which the Lessor may sustain,
incur or become liable for by reason of:
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(a) the failure, for any reason, of the Lessee to pay all rent or other
moneys contemplated to be payable by this Lease at the times and in
the manner contemplated by this Lease up to and including December
31, 2015;
(b) the failure, for any reason, of the Lessee to observe and perform
every obligation contemplated to be performed by the Lessee under
this Lease;
(c) any act or action by the Lessor for or in connection with the
enforcement of this Lease;.
(d) with respect to the whole of the obligations of the Lessee under
this Lease from the date the EML Inducement is paid by the Lessor to
the Lessee to and including the date the Lessee takes complete
occupancy of the Remainder Premises and is carrying on its business
in the Remainder Premises, but the amount of such indemnity is
limited to the amount of the EML Inducement which has been advanced
by the Lessor to the Lessee;
(e) with respect to the Remainder Loan(s); and
(f) any loss, cost, or damage suffered by the Lessor arising out of any
failure by the Tenant to pay any rent or other amounts payable
described in subsections (a), (b), (c) and (d) above, the Remainder
Loan(s) or to perform any of the obligations of the Tenant under the
Lease or arising out of the failure by the Tenant to complete
performance of its obligations under the Lease as a result of the
disclaimer of the Lease or other extinguishments of the Lease
obligations prior to the termination date of this Lease;
18.2 Enforcement of Indemnity
The Lessor shall have the right to enforce this Indemnity regardless of
the acceptance of additional security from the Lessee and regardless of
the release or discharge of the Lessee by the Lessor or by others or by
operation of any law.
18.3 Continuation of Indemnity
This Indemnity is absolute and unconditional and, without limiting the
generality of the foregoing, the liability of the Indemnifier under this
Indemnity shall not be deemed to have been waived, released, discharged,
impaired, or affected by reason of the release or discharge of the Lessee
in any receivership, bankruptcy, winding-up, or other creditors'
proceedings, or the rejection, surrender, disaffirmation, or disclaimer of
this Lease by any party or in any action or proceeding, and shall continue
with respect to the periods prior thereto and thereafter for and with
respect to the Term and any renewals thereof. The liability of the
Indemnifier shall not be affected by any repossession of the Demised
Premises by the Lessor, provided however that the net payments received by
the Lessor, after deducting all costs and expenses of the repossession and
re-letting the same, shall be credited from time to time by the Lessor to
the account of the Indemnifier and the Indemnifier shall pay any balance
owing to the Lessor from time to time immediately upon ascertainment.
18.4 No Defence
No action or proceeding brought or instituted under this Indemnity and no
recovery in pursuance thereof shall be a bar or defence to any further
action or proceeding which may be brought under this Indemnity by reason
of any further default or default hereunder or in the performance and
observance of the covenants, agreements, conditions and provisos of this
Lease.
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18.5 Modification in Writing
No modification of this Indemnity shall be effective unless the
modification is in writing and signed by the Indemnifier and the Lessor.
18.6 Authority
The Indemnifier covenants with the Lessor that the Indemnifier has the
necessary power to give this Indemnity and is jointly and severally bound
with the Lessee for the fulfilment of all obligations of the Lessee under
this Lease as though the Indemnifier was the Lessee named in this Lease.
18.7 Enurement
All of the covenants, agreements, conditions and provisos of this
Indemnity shall extend to and be binding upon the Indemnifier, its
successors and assigns and shall enure to the benefit of and may be
enforced by the Lessor, its successors and assigns and the holder of any
mortgage to which this Lease may be subject and subordinate from time to
time.
18.8 Assignments, Reorganization, Etc.
Notwithstanding any other provision of this indemnity, in the event this
Lease is assigned, sublet or otherwise transferred by the Lessee with or
without the consent of the Lessor or there is a reorganization, merger,
sale, partnership change or other change in ownership interest in the
Lessee, the Indemnifier shall remain liable for the performance of its
obligations hereunder, except that the indemnity of the Indemnifier will
not extend to any new obligation of the transferee assumed in a
modification of this Lease.
18.9 New Lease
If this Lease is terminated, disclaimed, or surrendered (other than if
voluntarily surrendered by the Lessee with the Lessor's consent), then at
the option of the Lessor the Indemnifier will lease the Demised Premises
from the Lessor on the terms and conditions of this Lease, except as to
any extension or renewal, for a term equal in duration to the residue of
the term remaining unexpired at the date of the termination, disclaimer,
or surrender. It will not be necessary for a further lease document to be
executed by the Indemnifier (but the Lessor may require a new lease
document to be executed), and the execution of this Lease by the
Indemnifier will be treated as executed by the Indemnifier as tenant of a
lease of the Demised Premises on the conditions of this Lease. The
Indemnifier will accept that lease and pay rent and observe and perform
the terms and conditions of that lease. The Indemnifier will do all acts
and execute all such documents as the Lessor may reasonably require to
give effect to the intent of this section 18.9.
18.10 Governing Law and Attornment
This Agreement will be governed by and construed in accordance with
British Columbia law and the applicable Canadian laws, and will be treated
in all respects as British Columbia contract, and the Indemnifier agrees
to attorn to the jurisdiction of the British Columbia courts.
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PART 19 -- RIGHT OF FIRST OPPORTUNITY
19.1 Right of First Opportunity
The Lessor agrees that it will not market the Lands and the Building for
sale without first providing the Lessee with the right of first
opportunity set out in this Section 19.1. If not in default of any of the
material terms or conditions of this Lease, and subject to Section 19.2
herein, the Lessee will have an exclusive right of first opportunity
during the Term and any renewal thereof to purchase the Lands and the
Building, free and clear of all liens, charges and encumbrances other than
the encumbrances set out in Schedule "C" to this Lease (the "Permitted
Encumbrances"), and the Lessor's mortgage or mortgages if the Lessor
intends to take the Lands and the Building to market with an assumption of
such mortgage or mortgages, on the following terms:
(a) the Lessor agrees that before marketing the Lands and the Building,
the Lessor will first provide the Lessee with written notice (the
"Offer Notice") specifying the purchase price (the "Purchase Price")
at which the Lessor intends to take the Lands and the Building to
market and whether or not the Lessor's mortgage or mortgages are to
be assumed;
(b) if the Lessee advises the Lessor, in writing, within twenty (20)
business days of receipt of the Offer Notice that the Lessee is
interested in purchasing the Lands and the Building, each of the
Lessee and the Lessor will negotiate, in good faith, to finalize and
execute a purchase agreement in which the Lessee acquires the Lands
and the Building from the Lessor;
(c) if the Lessee and the Lessor are unable to finalize and execute a
purchase agreement within sixty (60) days of receipt by the Lessee
of the Offer Notice, then the Lessor will have twelve (12) months to
sell the Lands and the Building to a third party on whatever terms
and conditions the Lessor may decide in its sole discretion,
provided such purchase price is not less than 95% of the purchase
price offered by the Lessor to the Lessee within such sixty (60) day
period; and
(d) in the event that the Lessor does not sell the Lands and the
Building to a third party within the twelve (12) month period, this
right of first opportunity will continue to apply to the Lands and
the Building.
19.2 Right of First Refusal to Purchase
If not in default of any of the material terms and conditions of this
Lease, the Lessor hereby grants to the Lessee a right of first refusal,
irrevocable with the time limited herein, to purchase the Lands and the
Building on the terms and conditions set forth in this Section 19.2. The
Lessor hereby covenants and agrees that it shall not, prior to the
expiration or earlier termination of the Term, including any renewal
thereof, sell, agree to sell, transfer or in any manner dispose of or
agree to dispose of the Lands and the Building or any part thereof except
pursuant to a bona fide arms' length offer (the "Third Party Offer") which
is conditional upon the Lands and the Building first being offered to the
Lessee pursuant to this right of first refusal and in accordance with the
following procedure:
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(a) if the Lessor receives a Third Party Offer which the Lessor is
prepared to accept, the Lessor shall send a notice of its intention
to accept such Third Party Offer to the Lessee together with a
duplicate copy of such Third Party Offer;
(b) such notice sent by the Lessor to the Lessee shall constitute an
offer (the "Offer") to the Lessee to sell to the Lessee the Lands
and the Building on exactly the same terms and conditions as set
forth in the Third Party Offer excepting only any condition
precedent pertaining to due diligence inquiries with respect to the
Lands, the Building and this Lease;
(c) the Offer shall be open for acceptance by the Lessee for a period of
fifteen (15) business days from the date the Offer is made to the
Lessee;
(d) if the Lessee accepts the Offer within the time limited, then there
shall be a binding agreement of purchase and sale for the Lands and
the Building between the Lessee and the Lessor on the terms and
conditions of the Offer;
(e) if the Lessee does not accept the Offer within the time limited,
then the Lessor may accept the Third Party Offer and may complete
the sale and purchase contemplated therein and the Lessee shall
forthwith provide the Lessor with the necessary release of this
Right of First Refusal; and
(f) if the sale and purchase pursuant to the agreement constituted by
the acceptance of the Third Party Offer shall not complete on the
intended closing date or within three (3) months thereafter if
agreed to by the Lessor and the Third Party, then this right of
first refusal shall again continue to be binding upon the Lessor and
the Lessee on the terms and conditions set out in this Section 19.2.
19.3 Exceptions to Right of First Refusal to Purchase
Notwithstanding the terms and conditions of Section 19.2, the Lessor shall
be entitled to transfer or assign the Lands and the Building to a
corporation controlled by the Lessor, or affiliated to the Lessor, or to a
corporation which controls the Lessor, or solely to one of the
corporations comprising the Lessor or to the shareholders of either such
corporation, without having to comply with the terms and conditions of
Section 19.2.
PART 20 -- CONTRACTION AND EARLY TERMINATION RIGHT
20.1 Contraction and Early Termination Right
Provided the Lessee is not, at the time of the exercise of this option, in
default under any of the material terms and conditions of this Lease, and
has not assigned the Lease (with the exception only of an assignment
pursuant to Section 8.2) or sublet the entire Demised Premises, the Lessee
will have one option to surrender any floor, or the whole, of the Demised
Premises effective on June 30, 2010 (the "Surrender Date") and otherwise,
on the following terms and conditions:
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(a) the option must be exercised by delivery to the Lessor of written
notice on or before June 30, 2009 which must specify the area to be
surrendered (the "Surrendered Area");
(b) the Surrendered Area must be either the whole of the Demised
Premises or any one or more floors comprising the Demised Premises
to the full extent such floor or floors are leased by the Lessee;
(c) on the Surrender Date the Lessee will deliver up possession of the
Surrendered Area in accordance with the provisions of this Lease,
and covenants and agrees to concurrently deliver to the Lessor a
cancellation payment (plus applicable goods and services tax) equal
to the aggregate of:
(i) the unamortized balance, as of the Surrender Date, of that
portion of the HVAC inducement described in Section 4.3 of
this Lease attributable to the Surrendered Area, if any, which
has been amortized using the mortgage method at an annual
interest rate of 8% and assuming equal monthly payments over
the period from January 1,2003 to December 31, 2014;
(ii) the unamortized balance, as of the Surrender Date, of the
lighting inducement described in Section 4.7(b) of this Lease
which has been amortized using the mortgage method at an
annual interest rate of 8% and assuming equal monthly payment
over the period from January 1,2003 to December 31, 2014;
(iii) if any part of the Surrendered Area includes a washroom for
which the Lessee received an inducement pursuant to Section
4.9(a) of this Lease, the unamortized balance, as of the
Surrender Date, of the amount of such inducement which has
been amortized using the mortgage method at an annual interest
rate of 8% and assuming equal monthly payments over the period
from January 1,2003 to December 31, 2014;
(iv) the unamortized balance, as of the Surrender Date, of that
portion of the corporate entrance inducement described in
Section 4.9(b) of this Lease, which has been amortized using
the mortgage method at an annual interest rate of 8% and
assuming equal monthly payments over the period from January
1, 2003 to December 31, 2014;
(v) the unamortized balance, as of the Surrender Date, of that
portion of the EML Inducement attributable to the Surrendered
Area, if any, which has been amortized using the mortgage
method at an annual interest rate of 8% and assuming equal
monthly payments over the period from January 1,2003 to
December 31, 2014;
(vi) if the second floor is part of the Surrendered Area, the
unamortized balance, as of the Surrender Date, of the Patio
Inducement which has been amortized using the mortgage method
at an annual interest rate of 8% and assuming equal monthly
payment over the period from January 1,2003 to December 31,
2014;
(vii) if any part of the Surrendered Area includes a washroom for
which the Lessee received an inducement pursuant to Section
4.7B(h) of this Lease, the unamortized balance, as of the
Surrender Date, of the amount of such inducement which has
been amortized using the mortgage method at an annual interest
rate of
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8% and assuming equal monthly payments over the period from
January 1,2003 to December 31, 2014;
(viii) the unamortized balance, as of the Surrender Date, of a
proportionate share of the leasing commission paid by the
Lessor (and confirmed in writing by the Lessor to the Lessee)
with respect to the amendment and restatement of this Lease
which was made effective February 28, 2002, such share to be
the proportion that the Rentable Area of the Surrendered Area
is of the Rentable Area of the Demised Premises, which share
has been amortized using the mortgage method at an annual
interest rate of 8% and assuming equal monthly payments over
the period from January 1, 2003 to December 31, 2014; and
(ix) a sum equal to twelve (12) months Rent per square foot of the
Surrendered Area.
(d) if the Lessee shall neglect or fail to make the full payment
described in Section 20.1(c) on or before the Surrender Date then,
notwithstanding anything herein to the contrary, at the option of
the Lessor, the Lessor may either pursue any remedy available to it
at law and otherwise to claim and collect such payment or give
notice to the Lessee that this Lease shall continue in full force
and effect as if such option had not been exercised and the Lessee
shall then remain bound by all of the terms and conditions of this
Lease, except for this Part 20 which shall automatically terminate
and be at an end;
(e) upon exercising such option:
(i) the Lessee shall not be entitled to assign this Lease (with
the exception only of an assignment pursuant to Section 8.2),
or sublet all or any part of the Surrendered Area as provided
for in this Lease;
(ii) all of the terms and conditions of Part 19 of this Lease shall
automatically terminate and be at an end;
(iii) if the first floor comprises all or a part of the Surrendered
Area then section 16.1 shall automatically terminate and be at
an end; and
(iv) exclusive signage rights pursuant to Section 5.5 shall
automatically terminate and be at an end;
(f) if the Lessee vacates any part or parts of the Surrendered Area
prior to the Surrender Date, the Lessee acknowledges and agrees that
the Lessor may enter in and take possession of such area or areas
prior to the Surrender Date for any purpose the Lessor desires
without affecting, modifying or reducing in any way the obligations
and covenants of the Lessee pursuant to this Lease, except that:
(i) the Lessee shall have no further obligations or liabilities
with respect to any part or parts of the Surrendered Area for
which the Lessor has entered and taken possession from the
date the Lessor has entered and taken possession other than to
pay Rent until the Surrender Date and the cancellation payment
described in Section 20.1(c); and
(ii) in so doing, the Lessor must not disrupt the business
operations of the Lessee;
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(g) such surrender, and the acceptance thereof by the Lessor, will be
without prejudice to any claims or liabilities of the parties
existing prior to the applicable Surrender Date;
(h) Rent will be apportioned as at the Surrender Date;
(i) if the Surrendered Area comprises more than 50% of the Rentable Area
of the Demised Premises, then the Lessee will, as at the Surrender
Date, also surrender its rights relating to exclusivity (with the
exception of the First Floor Patio or the Second Floor Patio if the
Lessee continues to lease the first floor or the second floor, as
the case may be) including, without limitation, naming rights for
the Building but subject to Sections 20.1(e)(iv), (j), (k) and (l);
(j) if the Surrendered Area contains either the second floor or third
floor, then from and after the earlier of the Surrender Date and the
date upon which the Lessee vacates a part or parts of the
Surrendered Area the exclusive use of the Main Entry and the
westerly elevator shall automatically terminate and be at an end;
(k) if the Surrendered Area contains the first floor, then from and
after the earlier of the Surrender Date and the date upon which the
Lessee vacates a part or parts of the Surrendered Area the Lessee
shall only be entitled to the use and enjoyment of one exclusive
loading bay;
(l) if the Surrendered Area contains either the second and/or third
floor, but not the first floor, then from and after the earlier of
the Surrender Date and the date upon which the Lessee vacates a part
or parts of the Surrendered Area the Lessee shall only be entitled
to the use and enjoyment of two exclusive loading bays; and
(m) from and after the Surrender Date (or earlier if the Lessee vacates
any part or parts of the Surrendered Area prior to the Surrender
Date as contemplated in Section 20.1(f)) and the Lessor elects to
take possession of such Surrendered Area prior to the Surrender Date
the Lessor shall be entitled to use any HVAC equipment installed at
any time by the Lessee in any part of the Surrendered Area and on
the roof area as described in Section 4.3 and related base building
services including, without limitation, power supply that services
any of the Surrendered Area, in common with the Lessee, provided
such HVAC equipment continues also to service those parts of the
Demised Premises which are not surrendered by the Lessee, and the
maintenance and repair of such HVAC equipment is wholly assumed by
the Lessor as an Operating Cost to be allocated proportionately to
the leased premises within the Building which are serviced by the
HVAC equipment.
20.2 Partial Floor Areas
In addition to the written notice pursuant to Section 20.1(a), the Lessee
may submit to the Lessor written notice that it wishes to include in the
Surrendered Area an area that is only a part of a floor. The delivery of
such notice shall not be considered notice pursuant to Section 20.1(a).
Upon receipt of such further notice from the Lessee, the Lessor shall be
entitled, in its full and absolute discretion, to determine whether the
Lessee may include in the Surrendered Area any part of the Building which
does not comprise a full floor to the extent such floor is being leased by
the Lessee.
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PART 21 -- MISCELLANEOUS
21.1 Joint and Several Obligations
If there be more than one Lessee, the covenants and obligations hereunder
on the part of each Lessee, respectively, shall be deemed to be joint as
well as several.
21.2 Time of the Essence
Time shall be of the essence of this Lease.
21.3 Headings
The headings appearing in this Lease have been inserted as a matter of
convenience and for reference only and in no way define, limit or enlarge
the scope or meaning of this Lease or any provision hereof.
21.4 Naming Rights
The Lessee shall have the exclusive naming rights to the Building
throughout the Term and any renewal thereof if the Lessee exercises its
option to renew the whole of the Demised Premises, subject only to the
approval by each of the Lessor and the City of Vancouver as to the design
and sign location and Smithe Street signage rights granted to the
Vancouver English Centre.
21.5 Loading Dock
After completion of the Lessor's Repairs/Work contemplated in Section
4.7B, the Lessee shall be granted the exclusive use of four (4) bays in
the loading dock area during the Term and any renewal thereof together
with forklift access from the loading bays to the Lessee's ground floor
space, at no charge, it being understood and agreed that intermittent
loading and unloading required for building operations shall be permitted
in such bays.
21.6 Governing Law
This Lease shall be construed and governed by the laws of the Province of
British Columbia. All of the provisions of this Lease shall be construed
as covenants and agreements as though the words importing such covenants
and agreements were used in each separate paragraph. Should any provision
of this Lease be illegal or not enforceable, it or they shall be
considered separate and several from the Lease and its remaining
provisions and conditions shall remain in force and be binding upon the
parties hereto as though the illegal or unenforceable provision or
provisions or conditions had never been included.
21.7 Entire Agreement
The Lessee acknowledges that there have been no representations or
warranties made by the Lessor which are not set out in this Lease. This
Lease embodies the entire terms of the lease agreement with respect to the
Building and the Demised Premises between the Lessor and the Lessee, and
supersedes all prior agreements, if any, with respect to the Demised
Premises between the parties hereto.
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21.8 Enurement
This Lease shall enure to the benefit of and be binding upon the parties
hereto, their respective heirs, executors, administrators, successors and
permitted assigns and other legal representatives, as the case may be.
IN WITNESS WHEREOF the parties hereto have duly executed this Lease as of the
date first above written.
LESSOR
LAURELTON INVESTMENTS LTD.
Per: /s/ Xxxxxx Xxxxx
----------------------------
Authorized Signatory
KBK NO. 197 VENTURES LTD.
Per: /s/ Xxxxxx Xxxxx
----------------------------
Authorized Signatory
LESSEE
CRYSTAL DECISIONS, CORP.
Per: /s/ Xxxx Xxxxx
----------------------------
Authorized Signatory
INDEMNIFIER
CRYSTAL DECISIONS, INC.
Per: /s/ Xxxxx X Xxxxx
----------------------------\
Authorized Signatory
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SCHEDULE "A"
PLAN OF PREMISES
(OUTLINED IN BLACK AND RED)
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SCHEDULE "B"
RULES AND REGULATIONS
1. The Lessee shall at all times abide by all laws, rules, regulations,
ordinances, provisions and requirements relating to the Building or to the
Demised Premises of which it has notice and shall keep the Demised
Premises, its employees, servants, agents and invitees under its control
so as to prevent the performance of any act, or the carrying on of any
practice which would damage the Building or its reputation or the Demised
Premises or could injure or annoy the other tenants in the Building, their
employees, servants, agents, or invitees or the public.
2. The Lessee shall not keep or display any merchandise on, or otherwise
obstruct the corridors or other areas adjacent to the Demised Premises.
The Lessee agrees to promptly remove any displays or merchandise that the
Lessor feels is objectionable.
3. The Lessee shall not overload any floor of the Demised Premises: in excess
of one hundred (100) pounds per square foot live load on the 1st floor of
the Building; one hundred and fifty (150) pounds per square foot live load
on the 2nd floor of the Building; and fifty (50) pounds per square foot
live load on the 3rd floor of the Building; nor shall it hang or suspend
from any ceiling or any part of the Building any equipment, displays,
fixtures or signs which are not authorized by the Lessor or its
architects.
4. The Lessee shall at all times keep the Demised Premises in a clean and
sanitary condition, including the inside and outside of all glass, the
doors and windows of the Demised Premises, together with all exterior
store front surfaces of the Demised Premises, in accordance with the laws
and direction, rules and regulations of any governmental, municipal or
other agency having jurisdiction. In the event that the Lessor, in its
sole discretion, determines that a Lessee's premises is unsightly, the
Lessor, shall have the right to require the Lessee to install, at the
Lessee's sole cost and expense, venetian window blinds of a type
satisfactory to the Lessor within thirty (30) days after having received
written notice from the Lessor. The Lessee shall not place, or permit to
be placed, any obstructions or merchandise, on, in or near any corridors,
rear entrances, service corridors or loading areas. The Lessee agrees to
remove all merchandise from the loading area immediately upon such
merchandise being delivered.
5. The Lessee shall notify the Lessor, in writing, of its intention to add or
modify lighting, electrical wiring or plumbing in the Demised Premises,
and shall obtain the Lessor's written approval prior to carrying out said
work. In any event, all such work shall be carried out by qualified,
licensed tradesmen in accordance with all applicable building codes.
6. The Lessee and Lessee's employees and agents shall not solicit business
in the parking area or sidewalks surrounding the Building or other common
areas, nor shall a Lessee distribute or post any handbills or other
advertising material in the parking area or other common areas of the
Building.
7. The Lessee shall not use or permit the use of any objectionable
advertising medium such as, without limitation, loudspeakers, phonographs,
televisions, public address systems, sound amplifiers, radio or
broadcasting within the Building which is in any way audible or visible
outside of the Demised Premises. No aerial shall be erected on the roof or
exterior walls of the Demised Premises, or on the ground, without, in each
instance, the written consent of the Lessor, such consent not to be
unreasonably withheld or delayed. Any aerial installed without such
written consent shall be subject to removal without notice at any time.
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8. The plumbing facilities shall not be used for any other purpose than that
for which they were constructed, and no foreign substance of any kind
shall be thrown therein and the expense of any breakage, stoppage or
damage resulting from the violation of this provision shall be borne by
the Lessee whose employees, agents or invitees shall have caused it.
9. For the benefit and welfare of all lessees of the premises of the
Building, as it may exist from time to time, the Lessor shall have the
right to issue further reasonable rules and regulations and such further
rules and regulations shall thereupon be binding upon the Lessees. The
Lessee agrees to comply with all rules and regulations on notice to the
Lessee from the Lessor.
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SCHEDULE "C"
(INTENTIONALLY DELETED)
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SCHEDULE "C"
PERMITTED ENCUMBRANCES
Easement and Indemnity Agreement 103977M
Easement and Indemnity Agreement N7627
Equitable Charge N 7628
Easement and Indemnity Agreement N88387
Easement and Indemnity Agreement GC69464 with respect to Lots 60 and Z only
Indemnity Agreement 449690M with respect to Lot 61 only
Easement and Indemnity Agreement N7624 with respect to Lot Z only
Statutory Right of Way N7629 with respect to Lot Z only
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